Lots of emails and comments asking how the Blog comes up with its figures for 12p a share on Matra petroleum. So here we go it’s a wee bit complicated and
- Onwards & Upwards Matra!
as ever you’re welcome to debate the process.
Calculate the different oip figures 15.1, 30, and 50, million attribute $80 dollars a barrel for the Urals blend (which I’ve HEAVILY discounted) for three different OIP figures, x each oip figure by 80 dollars. For instance 15,100,000 x 80 = 1.2 billion dollars give or take the odd 8 million then divide this by 2 billion etc. Do this for each oip figure, 30 million barrels comes out at approx’ 2.4 billion dollars, 50 million comes in at about 4 billion dollars then divide each figure by shares in issue or shares likely to be in issue ie 2 billion shares after placing etc Take away 80% of the gross figures for oil in place, what you’re left with even at the low case is $300 million dollars in revenue.
Divide the $300 million by 2 billion which leaves 15 cents or approx 12p per share give or take the odd cent and that’s the low case. Or calculate the cash-flow from 1000, 2000, 3000, 4000, 5000 and 6000 bopd. A thousand barrels of oil sold at $80 dollars per barrel = $80,000 gross per day 3,000 bopd equates to $240,000 dollars gross per day, 6,000 bopd comes to $480,000 per day times each one by 365. The high case comes to 175.2 million dollars per year the low case comes to 29.2 million dollars per year on production alone, divide each production cash flow figure by 2 billion then discount the figures by 70%/ or 80% what you’re left with is a range of 20/40 cents per share and remember the oil price is HEAVILY discounted and the calc’s are for A one year production cycle not 4/5! It’s a bit complicated but the equation is clear enough, each share on the “low-case” full production must be worth a minimum of 12p.
A sustained production run over 12/24 months will see the sp hit levels unthought of today. Then there’s the imponderables such as new assets, improved OR new production, increasing oil price, tax breaks, ALL PRODUCTION COSTS ARE OFFSET AGAINST TAX etc If they had been producing 3,000 barrels of oil per day for the last 2 years where would the share price be TODAY? That’s why Delek are fully supportive of the company, the potential here for massive gains once production kicks in is phenomenal. Remember there’s no debt on the company and they own 100% of Soko’ discovery. It’s long been known by the Blog that Matra have deliberately been conservative with the OIP figures. You can bet your bottom that the OIP doubles in 2012 AS PRODUCTION AND NEW SEISMIC ARE ACQUIRED.
Remember Delek are not interested in a $50 million dollar company what they are looking at is a $500 million dollar company. So based on the figures alone it’s obvious why Delek are fully supportive. The case is compelling. As for the funding there’s not an oil company on the AIM that hasn’t farmed out or run an Institutional placing it’s nothing new and it’s certainly not unique to Matra. All companys seek funding as they progress to production. The key here is to hold your stock and not to be swayed by erroneous statements emanating from online morons. Stick with the fundamentals of the oil play. What’s at stake here is a minimum of 1.2 billion dollars in gross revenue. They will and as I write are bouncing back up. Anything under 1.5p is in my opinion an absolute bargain!
Viva!
Dan
Keep up the good work Brokerman. I like the figures you’ve come up with. Why have you discounted Urals Blend to $80 when it’s trading at $107? This would give revenue numbers of over 1.5 billion dollars. on the 15 million barrels and 3 billion on the 30 million barrels.
Pickle
Good question.
I’ve discounted heavily on the current Urals Blend price for two reasons; 1/ The ongoing European meltdown,2/ Possible flutuations on Urals Blend over 12 months. It also helps to allow some leeway the discount can act as a buffer for future imponderables such as tax,production costs etc.
Dan
all well and good, the fact remains MTA will need to raise money soon. The PR campaign is a prelude. Raising money in this market!? However compelling the narrative–ok the oil is there- but is it easily accesible? On the other hand, the darkest hour is just before the dawn, and darker it hardly can get.!
Hi Dan,
I appreciate all your efforts in bringing the truth to public. My personal opinion is, these days it looks you are just focused on MTA and not with other potential blocks. There are few interesting news from Oil/Gas sector for last few days, if you comment in general rather than one potential one. People would turn back with confidence in your comments, I reckon. Again its my own thought being a well wisher.
Always I read your side, like the main highlights review everyday from maganzine.
Your follower,
V Siv A’dan
We’re not concentrating on Matra per se what we’re trying to do is high-light the potential in the company. Over the last two weeks I have blogged on 6 different stocks. As well as the daily newspaper round up, London open today, and the weekly Oil & Gas round-up which brings the amount of Blogs to over 30. That’s not counting the amount of emails answered each week approx 50/100 depending on news-flow, then theres telephone calls, contacts, company phone contacts as well as email contacts from sources/brokerages all wanting to state an opinion or give credence to a whisper not forgetting the designers of the new improved BMD blog who I have to liase with on a daily basis. Then on top of that there’s my work load after all I do have to pay the bills! My girlfriend also needs attention! (No pun intended) I’ve been promising her a night out at the theatre for the last 2 months! It’s just a question of organization and priority, I’ll get it right in the end.
Dan
Dan as always many thanks for the information. I have put my money where my mouth is and still think that potentially 12p is being conservative.
All the best
These have got to be worth 5p all day long dan. Look at desire they’ve got sweet fa yet there 23p! For Gods sake there’s only one reason why they’re at all time lows and thats because theyve been hammered online because they’ve allowed drill bores to erode over years, they’ll break 3p when they start producing on A13. Spoke to Neil Hodgson yesterday he doesn’t seem to think that the tsp reflects the value f the company let alone the potential and what about the value of an asset thats got 15.1 million barrels in place? How much is that worth undrilled got to be £30 or £40 million pounds at the least I’m tracking the Dalek. They’re happy to sit it out and they’ve invested millions so my 10k is in great company.
Dan,
Have read your posts over last few days and conducted my own research inot the Co and have bought 750k shares today. Onwards and upwards for all concerned. RH.
Dan,
Enjoy your posts. Sold out of Solo Oil and invested in MTA today. I would be grateful if you would offer you opinion on which Co you would rather be invested in going forward? Many thanks -RH
Dan,
These figures are laughable and show a real lack of understanding. The company will have to sell the majority of its oil domestically at a greatly reduced price and I believe management expect a net back of $13 per barrel. Take a look at other Russian oilers like EXI and PTR – you need to produce a whole lot of oil to make a small profit. 12p? No chance.
No you’re wrong I’ve spoken to the company as recently as this week. The actual net figure per barrel is significantly higher than your $13 which equates to 15.1 million x 13 =196.3 million dollars net to the company which is after Capex and Opex. Now even with your figures ie 196.3 million dollars the value per share comes in at 10 cents or approx 7/8p that’s your low-case which doesn’t take into account the recent favourable tax changes or the probable increase in OIP AND URALS BLEND PRICES WHICH ARE EXPECTED TO RISE OVER THE NEXT 12 MONTHS my calcs are heavily discounted by aportioning $80 per barrel when in fact the Urals blend price is significantly higher this is done for several reasons one being the actual price realised if Matra sell all their oil on the Domestic market which is as you know discounted. You can run different statistical analysis’s depending on what information you have the net result is the same Matra on full field development are worth a minimum of 12p!
Dan
Dan come on buddy stop pumping this stock, you have made so many post on this and for whatever reason this company has little to offer private investors except pain and misery.
Here is the share price over the last year
http://www.iii.co.uk/investment/detail?code=cotn:MTA.L&display=chart&it=le
its gone from a high of 5p to 0.5p.
Please find another stock to post about, Matra has cost alot of people alot of money !!!
dAN – Would appreciate your comments on the extract below taken from III – Thanks
“By the way BMD’s figures on which he bases the 12p sp target are completely erroneous. He uses a conservative US$80 per bbl for Urals Blend, but forgets that MTA wouldn’t get that US$80 per bbl. They would only get 52% of that US$80 per bbl because they they would be selling on the Russian domestic market. Taxes and royalties would also have to be taken into a/c as well as OPEX and CAPEX costs. In fact looneytune was told at this years AGM that MTA was only clearing US$13 per bbl from A-12 and A-13 production when the Urals Blend price was over US$100 per bbl.
BMD’s figures are vastly over optimistic unfortunately. It will need superlative results from A-14 to get anywhere near 12p per share next year.
MTA is a good buy below 1p, but don’t believe BMD’s hype.
Read the latest Matra epistle.
Cheers
Dan