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Bullboard - Stock Discussion Forum Mart Resources Inc MAUXF

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Mart Resources Inc > Down time, oil theft and nigerian oil price
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Post by Fernando2010 on Oct 15, 2012 8:54pm

Down time, oil theft and nigerian oil price

The way I see it:

We have an average down time of 2 days in august-september, and "pipeline losses" of around 13,3 % from the beginning of the year to end of August 2012 (see Oct 11 press release)

So, for an average field production of 100 bopd (based on producing days) the effective output is:

100 bopd X (1- 2/30) X (1-13,3%): 80,92 bopd

So, we can say that, on average,  we have a production loss of around 20% due to down time and "pipeline losses".

But, on the other hand, and trying to make a comparison with a similar E&P business in a more stable jurisdiction (for example, USA) we receive a greater price for our product (Brass River price of US$ 115 vs WTI of US$ 92 at the time of this post).

So, in order to know if the nigerian oil price differential compensates for the product losses, you simply apply the percentage of losses (roughly 20%, as I said before) to the Brass River price (US$ 115 per barrel). You get an effective "after losses" price of US$ 92 per barrel, similar to the WTI price.

I,m sure most north american producers are quite happy receiving a US$ 92 price for their oil. There is no reason for us not to be happy too.

Just my oppinion

Fernando

Comment by aazzcux on Oct 16, 2012 2:03am
Better tax rates, royalty rates and certain tax holiday till Q4 2013. Wells that test over 10,000 B's and produce at over 4000B's, 25-33 stacked zones, minimal depletion rates, field development instead of exploration risks,established relationships and in country skills and reputation, production to double by 2014 , 12% dividend yield,more oil to come from the east and west areas of this ...more  
Comment by Vanboarder on Oct 16, 2012 4:53am
You nailed it pretty good aazzcux. I just watched the latest AGM webcast again tonight and from what Wade was saying while yes we're waiting back for the official word on what Shell will allocate to us on their line MMT was essentially moving ahead with the work now (and that was at the time of the AGM months ago). I highly suggest if you haven't veiwed it to do so ...more  
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