Replies to post #13046 on Value Microcaps Junior Energy

[Traderfan]

MMT, I listened to the call myself. Thanks for your notes. Overall I have to say I hope that all bad news is out by now and that these levels here are accumulation levels IMO, unless something bad happens to the new pipeline negotiations or the existing pipeline or unless they scratch the divi which I don't expect. I'm a buyer here again and will buy more if we go a bit lower. Hopefully oil stays up for the next 9-12 months.

[stock_peeker]

MMT.v/MAUXF: I agree with Traderfan comments.

Thanks for your helpful summary. I haven't listened to the call yet. There were some significant negatives in your summary, particularly:
1. The pipeline will only be capped (not surrounded) by concrete. That makes it more accessible to the bunkering crowd.
2. Also I had hoped (unreasonably perhaps) that there would be an extended tax holiday for new areas drilled in Umusadege, which means the delays in pipeline repairs and new pipeline completion have cost shareholders much in 2013 tax benefits. Bummer! Since 2014 will not have the generous benefits of the tax holiday, much (not sure exactly how much) of the revenues generated by increased production will be lost to the nefarious Nigerian taxman!
3. Not much indication of merger with Midwestern, perhaps due mostly to the insufficiency of cash to do the deal (they can blame Agip and the bunkerers).

Regards,
'peeker

[dr_airtime]

MMT.V/MAUXF - Expect high cost recovery in H2-13...

...if you listen to call or read my notes below the CFO stated that total Capex, or perhaps a better way to put it, cash flow from investing activities (Umugini easement, clearing, pipe, central processing facility upgrade & commissioning, Umu-11, Umu-3 horizontal, Umu-East exploration well + other random) would be $90 million in 2013.

If you listened to the call, it obviously sounds like a lot of this will be in H2-13 so this means we could see another instance where we get 82.5% (maximum under risk service sharing agreement) of oil in Q3, and perhaps also a higher amount in Q4, though the production boost should mean we recover our cost oil faster.

Basically, as long as we ramp up, Capex does not matter for divvy security, because it is paid back so fast, and will get an EPS boost because revenues are recognized in 2013 but anything capitalized to Petroleum Property Interests is depreciated with depletion of reserves so expenses are spread out. As Q4 is always kind of hidden in year end results, a lot of shareholders new to the Mart story won't pick up on this, but it should make 2013 earnings look very good.

Don't forget that Q1-2012 we had 82.5% of oil at similar production levels from cost recovery on Umu-8.