Matrixx Resource Holdings, Inc.(fka MXXH)

[howies1]

MXXR DD #2 for Newcomers

When you hear them refer to our well as Allain LeBreton No. 2, did it ever get you wondering if their was a Allain LeBreton No. 1? Well you are in luck because I have the answer for you right here.

I have found that ORX Resources, a private organization, is the operator of our Allain LeBreton No. 2 well. I have also found they were the Operator of Allain LeBreton No. 1 as well. Here you will see they had run the pipeline to put that well into production.

ORX RESOURCES
C/O C.H. FENSTERMAKER & ASSOCIATES, INC.

LOCATION OF WORK: Lafourche Parish, LA: Section 7; T19S-R22E; Section 31 & 32, T18S-R22E

DESCRIPTION OF WORK: Proposed installation of one 4-inch flowline, approximately 7,494 feet in length to serve and produce the ORX Resources, Inc.- Allain Lebreton No. 1 Well. The line will be installed from the well, across the levee and then directionally bored below and existing ditch and roadway. The line will be installed on the surface of the marsh and directionally bored from the east side of the Hurricane Protection Levee below an existing ditch and roadway. An existing permitized pad site adjacent to the road will be used for the entry point and the backstring of the pipe will be placed on rollers adjacent to the levee at the exit point of the bore. The levee crossing will be conducted in accordance with U.S. Army Corps of Engineers’ specification. No tracked or wheeled vehicles will be used for the installation of the pipe across the marsh.
http://www.slld.net/mins-agendas/aug.html

The well was not however a perfect well. It produced natural gas at a strong rate of 2.55 million cubic feet per day but the oil production was not as what was expected in that they found oil and condensate as you will see here in a PR from a JV at the time.
http://www.sism.com/Ioc04082004.pdf

In addition, the Allain LeBreton No. 1 well was drilled to only 13,140 feet as seen in this PR from the former JV. http://www.sism.com/IOC%20PR%20Feb%2013%202004.pdf The significant difference here is that ORX Resources and the JV's have decided to drill the Allain LeBreton No. 1 well down to 14,500 feet where they anticpate from further 3D Seismic survey's they will locate 11 million barrels of oil.

The Allain LeBreton No. 1 well showed signs that the oil was there for the taking, all we have to do this time is just tap into it and hopefully drilling down another 1,400 feet at a new location will do the trick.

Worst case scenario we only find gas:

2.55 million cubicfeet per day is equal to 2627 MMBTU per day

2627 x $7 Average per MMBTU = $18,389 per day (not accounting for higher winter pricing)

$18,389 x 365 days in a year = $6,711,985

$6,711,985 x 5% interest = $335,599 Annual Revenue for VNBL

At this time, I do not know the potential size of the natural gas reserve so I cannot calculate how much this reserve would effect the book value of MXXR as I have if they locate oil.

Not bad when you consider the stock is trading at 2 cents with only 97,595,274 O/S and very little debt. I've seen oil company's trading much higher with no revenue stream and a much higher O/S while carrying a very heavy debt load. In the least, you know your secure entering the stock at the current trading range.

Best case scenario is we find the 11 million barrels of oil:

11 million barrels x $70 a barrel = $770,000,000

$770,000,000 x 5% interest = $38,500,000

$38,500,000 / 97,595,274 shares outstanding = asset book value of 39 cents a share.

Now for real book value:

Asset from new well if proved = $38,500,000

$38,500,000 + $1,825,000 assets currently reported in most recent filing = $40,325,000

$40,325,000 - $612,000 in total liabilities reported on last SEC filing = $39,713,000 Total Stock Holder Equity

$39,713,000 Total Stock Holder Equity / 97,595,274 Shares Outstanding = 41 cents Book Value.

If they do hit recoverable oil, the book value of the stock will jump to 41 cents a share. Now when we consider that oil stocks are currently trading two - three times book value, we could theoretically see the stock trading to as high as $.82 - $1.23 in a very short period of time. That would generate one heck of a return for a stock currently trading at 2 cents a share. Now I am not speculating, nor do I believe the stock will ever trade to $1.23 but I have however proven it to be a real possibility if they do prove oil with the current drilling program.

This will be the second well for ORX Resources in this area, I seriously doubt they would drill another well that deep if they only expected to find natural gas again this time and not recoverable oil, especially when you consider the drilling to cost in excess of $5,000,000 and ORX Resources is putting up the majority of the cash from what I have found. This well is not a hoax or a phantom well that does not exit, I have even found licensing and permitting of this second well.

Either best case scenario or worst case scenario, I think I have proven without a doubt that the share price will move up with the results of the current drilling program taking place. I hope this has been helpful for those on the fence about investing in this stock.

Brad


The info and DD I provide is accurate and factual to the best of my knowledge but still I am human and you should always do your own DD.

Benjamin Franklin once said -
"I am a strong believer in luck and I find the harder I work the more I have of it."