Mart Resources Inc MAUXF

A post from IV

[bakken13]

I took profit (again) on a big chunk of MMT. Below's why.

 

Let’s look at the catalysts:

1. UMU 10: bottom sand gave excellent results on which we got this rise, the other sands will be fairly in line with other drill results and w/o a pipe-line it’s pretty superfluous. The best (reserve related) news has come out of UMU 10 on this NR
2. Bigger pipe-allowance: possible, but let’s say we go to 8k net. Including pipe-line disruptions this will give roughly $0,50 cf p/s with a 3-4 cf multiplier gives $1,50-$2,00. Guess what the range we’ve been trading in
3. We just got the divvy – if I really want it I can get back in closer to date and avoid the risk
4. Shell pipe-line deal – by now everyone believes it will come, not sure this will give a big pop. It’s important but the actual rise will be when the pipe-line is done
5. Who believes the pipeline is done in June? I don’t.
6. But let’s say it does, reality is the tax will kick in pretty soon after that so even if we produce 35 k (17.5 k net) it won’t be the same ratio cf as we now get with the tax shield and at 3-4x cf we’ll still have $2,20 - $ 2,80 sp target
7. Reserves? - Even if they up reserves to 100 mln 2P (vs. current 19.2 mln 2 P), with a $ 10 attribution to 2P (Very high measured against recent acquisitions!!) and 50 mln 2P net you get to around $ 1,40 sp - and that's with a quintupling of reserves. Calculating a doubling or trippling of 2P at these prices gives a sobering picture.
8. Then Marginal field you say? Fantastic! I am sure we’ll get a pop but then we have the Nigerian waiting game to get the field in production. I am sure I’ll be able to get in after the dust settles, with this knowledge at a decent price  
9. Adding of RIG’s: interesting but cf from RIG’s part from drilling on own fields is not going to make the difference in my view. It will help but I think it’s healthy to have a show me attitude in Nigeria

 

No. All things considered I’d rather trade between $1,50-$2,00. This is my second $ 0,35 cent divvy trading trip and I only just missed a 3^rd one earlier. Big money. Low risk.