According to maps in MILL's investor presentation, the Sword Prospect has already been drilled by another operator & was a dry hole. I don't know why they would waste $10MM in drilling capital targeting a prospect that already known to be dry.
This is from their PR:
The Company expects to commence drilling the Sword #1 well later this month. Following the mobilization of Patterson's Rig-191 from Tyonek Village, all rig components are on location at the West McArthur River Field (WMR) drill site and are 95% assembled. The Sword #1 is designed as an extended reach well to be directionally drilled to 19,000 feet. It will target probable reserves in an adjacent fault block to the WMR field and test an up thrown fault closure. Company owned 3D seismic over the prospect area shows a faulted four-way closure with a 240 acre structure that contains an estimated recoverable 800,000 barrels of oil.
This is meant to be misleading. There is no oil in 'Sword', MILL knows this, I would imagine that they are just using the prospect to generate hype to help drive up share prices. I bet they never drill the prospect & if they do drill it then they need to hire a new geologists.
Why did you not continue with the next paragraph from the release? I will .. "Between 1964 and 1965 Pan American Corporation drilled the West Foreland's #1 well into the same fault block targeted for the Sword #1. The West Foreland's mud logs had oil shows throughout the 500 foot thick Hemlock formation, the primary target for Sword #1."
Pan Am plugged and abandoned the well.Why" Who knows! Oil was $2 / barrel, there was probably little to no infrastructure on the west side of the inlet, and they were probably looking for 100 million to billion barrel fields. Redoubt Shoal was plugged and abandoned as well and she sure is pumping oil today.
It would defy all logic for management to spend upwards on $20 million on a known dry hole all the while giving themselves options if the share price and production exceed targets.
Sentiment: Strong Buy
Shorts are getting desperate. Talk about taking stuff out of context. Next maybe we'll get another article on the "high cost" of wells like RU1 and RU2 which only have paybacks of 3 - 6 months. How about that natural gas shortage (Mill now selling gas) that was going to shut down drilling. How about the Accounter article where they "forgot" the 40% tax rebate in the net well costs.
How about the old MIll will be selling common equity since they had no access to capital - which came out before the Apollo tier II agreement and preferred stock sales. What's next? Maybe recycle an old negative article from years ago - LOL.
It is outrageous that drillingsolutions claims that Miller is misleading when, in fact, he actually is by picking and choosing sentences from the press release. Miller has Apollo looking over their shoulder and I doubt that would lend money on a known dry hole. Rather, it seems as though they loaned money for Miller to drill into a reservoir known to have a 500' thick oil column.
Sentiment: Strong Buy