It’s a crucial period over the next 10 days or so for Matra Petroleum as the company fight the good fight & try to bring production on-stream at their 100% owned Sokolovskoe field. The recent Oil Barrel presentation fronted by Peter Hind seems to have gone down quite well with those present, although I personally thought that he seemed a little edgy; there was no reference to the water problems that have plagued the company. In-fact the only time water reared its ugly head was when the erstwhile Managing Director took a swig from his glass. However his performance was one of the high-lights of the Oil Barrel Presentation.
For those of you unfamiliar with the Matra tale I’ll just run through the story quickly. Matra Petroleum was originally named Ming Resources & was listed in 2005. In 2006 the company was renamed Matra Petroleum plc & gained readmission to AIM after completion of a reverse takeover of Inke Petroleum (a private Australian company) & set about exploration in Hungary. In 2007 Matra acquired a Russian subsidiary owning the rights to the Arkhangelskoe Licence in Orenburg Russia. At the same time Delek-International Energy became a significant shareholder in the company. It was during 2007 that Matra discovered the Sokolovskoe Field in Orenburg. After which in 2008 the company exited from Hungary to concentrate on its Russian discovery.
Originally upon finding the oil, figures were being bandied around in excess of 60 million barrels. After major set-backs on drills, mainly due to the companies failure to isolate water, Matra found themselves in a challenging position. They had the oil but failed to bring on any long-lasting meaningful production which would ignite the sp. They have had test production recently on A12 (approx’ 1000bopd), A13 (approx 100bopd), but just as they looked set to fly water issues caused the company to shut down the drills. Eventually, running low on funds, they managed to isolate the water on A13 which was then shut-in while they concentrated on A12, which ultimately failed. Now after months of re-planning they are on the cusp of restoring production on A13 as well as shooting new seismic on the whole of the Sokolovskoe field with a planned drill (A14) into a patch-reef system known as sweet-spots. In order to progress they need funding. (More of which later) Matra Petroleum 17 Jan 2012 Fox d note
I managed to button-hole the company yesterday after several days of calls trying to confirm various points needless to say the company line was trotted out although they did confirm one or two interesting points, however we here don’t rely on companies to tell us what’s going on on the ground. No Sir we get busy!
It’s all hands to the pump over in Orenburg. News has been filtering out in dribs & drabs from one of our sources in Russia. As I understand it, Peter Hind is on site at the time of writing & Neil Hodgson ( Geologist) is rumoured to be flying out early March . We did hear that there was a “Big Boss” on site however it took some time to confirm this officially with the company (who confirmed this yesterday). Matras’ latest attempt to get A13 on production is on track with no major issues. All is going well. Activity has increased at the site. I was concerned re’ the latest epistle from Ranges’ Georgia drill where weather has delayed the spud, however this is not the case in Orenburg. These Russians crews are a tough bunch, bad weather or thawing only effects transportation they regularly work in sub-zero temperatures. The company did confirm that All the fabrication work gets completed in-doors, so there’s no issues there.
The next 10 days or so should see, fingers & toes crossed, A13 back on production. This is a significant event in the evolution of Matra. The effect on the SP could be significant. Once the oil begins to flow then it’s thought by most in the City that confidence will begin to return thus enabling the company to complete their funding for the up-coming seismic & A14 drill. It’s a pivotal point.
The share-price has took an awful battering over the last year even though the company are sat on large oil accumulations ranging from 15.1 million barrels right up to 84 million barrels depending on how future full field development pans out. It’s as good as it gets for a small oiler that owns 100% of the discovery. There’s two reasons why I’ve stuck with this company the first is that the oil is there it’s proven beyond doubt; the second is that regardless of how the past drills have gone Matras’ Geologist is a proven “Oil-finder” with literally dozens of oil & gas finds on his C.V; that’s fact.
Regarding price they are trading well under-value & have spiked to approx’ 5p on expected good news in the past. There’ll be some form of dilution/funding once the oil flows but over the longer-term as production increases, as well as bopd then they will rise significantly. It’s up to you to decide how best to research them but they are well worth putting on the watch-list. Meaningful production could see them hit 8/10p.
Of course it all depends on the coming months work & how well or badly they do. Nothing is certain when it comes to oil exploration/production, drills can quickly go wrong & investors here have certainly been through the pain threshold many times. I had a full head of hair when I began building up my Matra stake it’s been thinning ever since. (Now I know why PH & NH need reseeding!). I’m as confident as I can be that come the next 10 days or so the next RNS will be out.
It’s eyes on here.