Shares in Max Petroleum

cloud_dog

thewinkshow wrote: »

.....max on the other had used to be £2 a share a few years ago

Yes, there was a reason for that.

thewinkshow wrote: »

.....and is currently trading around the 20-22p mark and has not had its breakout and big find yet - with news in the pipleine, it would only have to go to 40p to double your money, and imagine if max did what excite did and went to 280p?

MXP is a big play on potential. At the moment it is just drilling the post-salt shallow zones. Has a drill programme of about 12+ wells, a couple have come in. The latest has hit oil over a wide range and the net pay could be in the region of 50mbbls. This one of the bits of news people are waiting on. They are also working over a previous find and news on what they means should be in the offing soon.

The big thing people are holding out for with MXP is the pre-salt areas which could serve up oil in the billions of barrels not just hte nice millings atm.

thewinkshow wrote: »

.....is there not more upside in max becuase the share price is lower?

More upside more risk.

MXP also has negatives it needs to negotiate. It has bond holders which needs paying. It has previously missed paying interest to bondholders and issued additional warrants (equity), this dillutes the shares to you or I. The outstanding warrants will be excercised at some point and there were a lot at 5p, and this is what has kept the SP quite low (until vbery recently), i.e. lots of shares being sold in to the market. There is a whole other tranche of warrants at 35p so this is also likely to weigh on the SP if it gets over 40p. I would image 35p warrant holders will wait until the SP is over 40p before excercising them.

Kazakhstan is an 'interesting' place to do business. MXP also have a possible £18m (I think) tax bill to pay (which sort of came out of nowhere).

As with other exploration / production companies they have conditions on their licences, i.e. so much exploration / drilling, timescales in to production etc etc.

Re the pre-salt areas, these are expensive to drill. MXP don't have the capital to do this, although excellent news from the recent drilling would all help in financing options.

We are told that they are looking (talking?) to partner with the partner bearing the costs and MXP retaining a share of the oil (probably). Again, positive news of this would be significant for the SP.

Overall MXP is a potential huge play but it is very complicated with lots of pot holes before you get there.

I rode MXP up to the £2 previously and hold a fair number atm.

Time will tell.

The old addage of do your own research is key here. It is still not impossible for MXP to go bust.

cloud_dog

Shatners_Bassoon wrote: »

That was released a few weeks back and it did nothing to move the share price so success was factored into the SP already. It will head north on successful flow testing etc...

Shats, not sure if you follow MXP or not but the RNS on 19th October was the big mover, almost doubling the SP (11p to 20p).

Shatners_Bassoon wrote: »

Good luck but 16m of net oil play is not a massive amount and there are better juniors to invest in imo.

I think its the wire logging and the effect of the other 86m which might be pf interest atm.

The importance of these shallow drills is important to the company as it helps cashflow and proves up the companies reserves. This gives it 'weight' in its partner discussions for the pre-salt drills.

From a reserves perspective it would give MXP the opportunity to go it alone and use its reserves to spend the £12m+ it will cost to drill one of the deeper wells. This is big risk for MXP if it fails so I think a partner is all important.

thewinkshow

Cloud Dog, Many thanks for your insightful post on Max, clearly there is quite a bit more than I am aware of in this oil game.

but is my point about xcite not valid? I dont seem the massive potential, compared with Max, I mean if xcite was 35p then yes I could see the upside, but at the current price, what is the best gain one can hope for realistically? I mean do people expect excite to go to 5 or 10 quid or something and be worth more than BP? or am I missing something? is the amount of oil on there books massive or something?

cloud_dog

thewinkshow wrote: »

Cloud Dog, Many thanks for your insightful post on Max, clearly there is quite a bit more than I am aware of in this oil game.

but is my point about xcite not valid? I dont seem the massive potential, compared with Max, I mean if xcite was 35p then yes I could see the upside, but at the current price, what is the best gain one can hope for realistically? I mean do people expect excite to go to 5 or 10 quid or something and be worth more than BP? or am I missing something? is the amount of oil on there books massive or something?

TWS, regarding the £5 or £10 I think you are confusing share price with market cap.

XEL SP is £2.79 with a market cap of £425m. If the SP went ot £10 the market cap would be £1.5b, still well short of BP.

Affraid I can't really comare XEL to MXP as I do not have a full understanding on what XEL have acjieved or what the potential is.

EDIT: having just read the XEL RNS from 8 November it appears that XEL have hit a mother load of oil in a deep well. The well XEL have just drilled is the type of deep well that MXP are working out (financially) how to do. Without knowing XEL area or other prospects then yes there is likley to be more potential upside for MXP compared to XEL. BUT, with potential comes risk. XEL have significantly de-risked themselves and there is likely to be more upside based on the wir logging.

As an example...... People who bet successfully on the horses don't bet on 20-1 (or such) they bet large amounts of sure things (if there is such a ting), i.e. £7k on a 1-7 favourite in order to win £1k. You get the idea).

thewinkshow

Many thanks. explained perfectly.

MiM

I would echo many of the comments here. I've had small (1k) investments spread across a lot of companies with potential. Some of them, like Rockhopper, Xcite and Chariot have multiplied several times over. Others are currently showing a loss, but I try never to sell at a loss. Investing in shares is a minefield and you learn from your mistakes.

I would strongly advise against setting stop losses. Usual warnings apply - never invest more than you can afford to lose, especially in these high risk/huge reward type shares. I agree that with 3k you should spread it. A thousand is a good unit per share. Don't try to be too clever and "trade" - pick and stick. Otherwise the spread - difference between buying and selling price, a bit like currency exchange, plus the fee and tax, will swallow your profit.

iii is a good, cheap account to hold. Good luck!

MiM

PS Consider Range Resources (RRL) if you're looking for another oilie with potenial.

thewinkshow

mim- i will have a look at range.


re-market cap of excite, not really sure what that is, but are people buying excite hoping to double or triple there money? i just think 5 pound or 7.50 a share is unrealistic, so dont see the potential at the current price of 280p

but max is 20p an used to be 2 pound and there is talk of an oil find, so i see potential. xcite would have had similar potential at 35p in feb this year - does this not seem correct?

I see my Friend on monday, will be asking for some more tips.
he said Max has the potential to be the next Rockhopper, I looked at Rockhopper and boy has it done well, anyone know how much oil they found? must have been quite a lot.

MiM

It's tempting to look for "groundfloor" possibilities like MAX and RRL but ideally you really need to combine these with safer bets, unless you're happy to just gamble the lot.

cloud_dog

thewinkshow wrote: »

but max is 20p an used to be 2 pound and there is talk of an oil find, so i see potential.

You are correct (thats why hold them) but MXP are extremely high risk. Not just risky.

You cannot look at the £2 share price; that was another time, you are not comparing like with like. Back then they had far fewer shares in issue (think back to my comments on the number of shares and warrants issued since then).

I think they have a bout 450m shares in issue, I think if all warrants are excercised and ifbond holdersconver to shares they may end up with 1billion shares in issue.