It’s been a tough few months for holders of Matra stock the feisty little oiler is as most know struggling to stop the water influx on A12. The Admin email has been flooded and the topic that stands out is the current situation with A12. Most think that is it, A12 200 BOPD! Matra have not given up on solving the water problem, far from it the company are known to be collecting data whilst actively investigating a solution to the problem our sources expect that they will once again attempt to locate and isolate it. Hind is on site in Orenburg. Current thinking varies as to where the water is coming from last week it was being considered that the 2008 drill into the OWC MAY have BEEN responsible the drill into the OWC wasn’t plugged/cemented until 2010 (this was my favoured theory). But on further investigation by the company it is now looking less likely. Water sampling could help here. I spoke to the company on Friday and suggested this. Yes the oil is flowing and the rates are approx’ 200bopd but that isn’t the end of it. Current thinking on a solution is positive from the company. It may well turn out that the water is seeping in from behind the lining from the Franski which is above the oil. A12 is as it stands commercial, profit is being accrued, I don’t understand how any one can see it as a major negative? It’s disappointing yes, however Oil is flowing and it will get better. Petroneft are similar to Matra, their wells flow at 200/300 bopd. The Independent assessment confirms commerciality with large potential upside there could be 80 million plus barrels. (ML Prospective Recoverable Resources – 29.6 million bbls High Case Prospective Recoverable Resources – 84.1 million bbls) There’s almost certainly significant oil reserves yet to be added and it’s on that basis that (Friday) I purchased a further 500,000 shares at 1.50. My current holding is now in excess of 3,000,000. If you look at the area surrounding the Matra field then you’ll discover that Matra are encircled with producing wells from other oilers. The oil IS there. The problem at the moment is water. I don’t know of any other similar company trading at these ridiculous levels. It’s safe to say that the stock has been plagued with day-traders and shorters looking to turn a quick buck and woeful Investor relations have not been helpful but the basis for sticking with the company hasn’t changed in-fact it’s got firmer. If you go back to 2009 the stoiip being bandied around was thus; STOIIP Low: 75 Best: 217 High: 485 Recoverable Low: 15 Best: 65 High: 194. Anyone wishing to work out the Stoiip can verify this by using the method below.
- = STOIIP (barrels)
- = Bulk (rock) volume (acre-feet or cubic metres)
- = Fluid-filled porosity of the rock (fraction)
- = Water saturation – water-filled portion of this porosity (fraction)
- = Formation volume factor (dimensionless factor for the change in volume between reservoir and standard conditions at surface)
The problem we’ve got is water nothing more nothing less. We’ve got the oil, we’ve got the licence, we’ve got production, we’ve got the infrastructure and we’ve got an experienced Board who will always battle through technical problems. And it’s on that basis that I am as confident as ever that this stock is a super investment over the next 6/12 months. There’s good news on the horizon. It’s your money you can always walk away. I’m here for the long-term. When they get it right there’s going to be more oil flowing than a few thousands barrels a day. Yes it will take time and no doubt further funding but the case for Matra is solid regardless of the moronic few who seek to knock the company at every turn. I’m keeping my powder dry here at the worlds favourite financial Blog and waiting. Believe me Matra will eventually solve and increase the bopd, thus the sp value. I will be unloading an unholy,vitriolic fire-storm upon those, who are even as you read this, posting blatant bullshit. No doubt when it happens they will twist and turn attempting to lie their way out of it. Watch this space and remember.