I estimated one week before the PR that their Q4 produciton was about 470 (PR reported 471) and Woodrush production should be the focus. Forget about those US gas properties for the moment.
Three questions I want to hear from them on Thursday's CC: 1. What's the reason causing Woodrush production to droop from 540 in Q3 to 471 in Q4 and a lower oil/gas ratio in Q4?
2. What's the current production level after the 3rd well tied in?
3. How will they achieve average about 1100 boed with about 900 bod in 2012 as they forcasted.
Let's forget about gas. If they can get an average 900 bod in 2012. The math looks like this: 900 bod * 365 days * $ 80 (net back/b) = about $30 MM. They claimed that they dont need to pay tax until 2014. So that $30 MM can be net earnings in 2012. $30 MM net earnings for a company whose MC is $42.5 MM.
With the cash flow generated from Woodrush, they can have patience developing their US gas properties while waiting the NG price to recover.
sold DEJ at $0.35 and bought more MAUXF at $0.82 a few months ago
Looking back now, it was a good move for me. Mart not only almost got doubled, but also started a dividend plan. For the rest of this year, it will give out $0.20 a share and will have a 5 cent quarterly dividend in the future. They could increase it as their production ramps higher with the shell pipeline connected. Basically, share holders of Mart will be paid a nice dividend to wait and watch their growth.
As I said for DEJ in this thread, Woodrush was their key. It was Woodrush that brought me into DEJ initially. If they could establish a solid production base on woodrush, they would have separated themselves from the rest of the junior speculative explorers as they would have generated enough cash flow to support their growth plan in kokopelli and so on. Without a solid cash flow, they would have to come to the stock market to raise cash, again and again, just exactly as I predicted.
I sill like DEJ's properties but I would just keep it on my watch list for now. Until they have their cash flow part taken care of, I would invest my money elsewhere, like Mart, even with its Nigeria risk as I will be collecting nice dividends while waiting.
Mart resources had a PR today, announcing its well test results. They discovered 19 oil zones and 1 gas zone in this well. Tested 5 oil zones with a combined flow rate of almost 12,000 bod, making those wells flowing a few hundred bod laughable.
There oil is selling as brass river, a premium over brent. So they are enjoying $100+ netback now ($95 net back during Q3 2011).
If nigeria is too risky of for you, take a look at New Zealand Energy Corp. Their PR mentioned their current net back is $90+.