Mart Resources Inc MAUXF

vestor111: line loss explained

[gibbonsj]

this is the short version.

Shell losses are running approx 16% which when realized represents a 10% to 15% net increase in MMT lift without having to pump a single extra barrel, providing the Shell deal goes through.

AGIP loss consists in large part of other producers feeding un-watered crude into the line whereas MMT's is fully dewatered. This is good part of why MMT is disputing the AGIP loss sharing formula.  The amount of loss attributed to water is 5%. The balance of the loss is a hard loss due to theft.  bunkering and manipulation at distribution. There is also an element of downtime factored into the loss which is far greater than actual theft.  The whole thing is expressed as line loss but there are a few issues bundle into the term. If the new pipeline partners are all dewatered and the Shell deal flies there’s an extra 20% in bbpd revenue in it for MMT plus the extra capacity of boosting AGIP’s line and +16% of the new line. It’ll come up roses if it all pans out. Not sure about the 16% share, it may be on the low side but even so its still +4500 bpd of additional revenue in it.

[vestor111]

Excellent explanation - thank you for that!   Any sense of when the Shell deal will be done?  There appears to be something in it for both parties and as long has Shell isn't too heavy handed it would appear to an outsider as a doable deal.  

[jumpth3shark]

Impressive metrics! So even being conservative we can look to add another 4,500 bopd, minimum. Let's hope the deal goes through! :)