MX Oil Plc and the elephant in the room
MX Oil is another one of the popular oil and gas minnows on the AIM listing, quoted resources company primarily targeting near term production assets in proven oil and gas jurisdictions such as Mexico and Nigeria.
The Elephant in the room that no one is picking up on!
Shares in Issue 379m – Share Price 2.08p
This is another one of the popular oil and gas minnows on the AIM listing, quoted resources company primarily targeting near term production assets in proven oil and gas jurisdictions such as Mexico and Nigeria.
Nigeria: MX Oil have a 5% interest in Aje 5 production well located in the proven Aje Field on the OML 113 licence offshore Nigeria. Aje, which was discovered in 1997, has multiple oil, gas and gas condensate reservoirs in the Turonian, Cenomanian and Albian sandstones, similar to the producing Jubilee field offshore Ghana. As announced on 13 July 2015, MX Oil has agreed to invest in a 5% revenue interest in OML 113 via Jacka Resources. Phase 1 was targeting first production in December 2015 but this is looking more like to be announced in early 2016. This will generate cash revenue for MXO with a possible share of 19,000 bopd gross.
Mexico: MX Oil together with its partner Geo Estratos JV has won four concessions in Veracruz, namely, Ponton, Tecolutla, La Laja and Paso de Oro. MX Oil believe the concessions will be transformational for the company and this is the very point I want to pick up on.
The elephant in the room: Anticipated Competent Persons Report (“CPR”) updates to be released in early 2016, MX Oil acreage could be a total game changer, a full re-rating of today’s market cap of only £8m.
A good guided for me was when the data room was opened for the bidding process. I think MX Oil bidding reflects what they looked at during this process. I can’t be the only one thinking that the markets, privateers are not picking up this point.
Are MX Oil punching above their weight or are the figures being talked about of 2 / 4 million barrels of oil achievable? If you look at Peak oil production from the 25 onshore fields, they will reach 77,000 barrels per day in turn have attracted over $1 billion in investment.
This is JV and if investors consider if the CPR delivers the figures mentioned above, you would have companies lining up to come onboard. Joint Venture procured with Pemex would be another total game changer and I can’t see what is not to like.
Numbers: 10-11-12-13 are the blocks MX Oil won.
Today’s share price of 2.08p has no CPR or Aje – Nigeria production asset news added and when you consider all news is due early 2016.
Is it just me or are the markets not looking at the elephant in the room?
2016 looks to be a very exciting year for MX Oil and I am sure Northcote Energy are watching event unfolding with a ten-year agreement that terminates on 1 August 2024 tucked away in their back pocket.
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