Madagascar Oil. Back from Oblivion.


Members should take a very close look at Madagascar oil which is currently coming off an all time low of 18p. The stocks beginning to trend up as we speak. The company listed in November  2010 on the AIM with a great call to arms to the city. They listed at 95p. The current share-price is 34p! The Blog thinks this represents a terrific investment opportunity.

Moil are focused on the development of heavy oil & conventional oil & gas deposits in five onshore blocks in Madagascar. They own significant exploration and development rights for oil and gas in Madagascar, in the last five years the Group’s two principal fields, Tsimiroro and Bemolanga, have been shown to have multi-billion barrel resource volumes in place. That means that the oil/gas is there. What the company have to do is to prove up the commerciality of their assets. Recent field tests & studies suggest that a large portion of the Company’s Tsimiroro heavy oil assets have excellent potential for economic development. There’s a pilot steam flooding project about to be set in motion.

In September 2011 Netherland Sewell & Associates upgraded the company’s asset Tsimiroro. The link below makes interesting reading.

So why are they trading at 34p? Well its been a very bumpy ride for Madagascar who had to suspend trading for six months after just 3 weeks of trading after listing. They were suspended at 74p. In March 2011 the company declared a “Force Majeure” as they became ever more deeply embroiled in the dispute with the Madagascar authorities.

Eventually they came back onto the market in June 2011. They rallied for a short while but confidence never really returned; while the markets continued to be driven by the sovereign debt crisis. They dipped below 20p.

But now all seems to be getting back on track (give or take the odd Global Recession) The dispute has been resolved. The Financial Times succinctly put it in the proverbial nutshell as thus; “Madagascar Oil is one of several London-quoted resource companies that have recently faced expropriation abroad as governments seek to capitalise on sharply rising commodity prices“.  What happened here was that the Madagascan Government basically tried to steal back the production sharing contract. That’s because there’s literally billions upon billions of dollars in oil revenue at stake. Greed reared its ugly head. The Robbery was rebuffed by the board who fought a bitter battle to keep control of their rightful assets. “Moil are back on course” that’s the company message.

Last months placing for $26.5 million dollars was fully subscribed.  Wagging London tongues intimate that it was actually over-subscribed. Which is good news, this means that stake-building is more than likely pushing the sp.

So what are these worth? Well call me an optimist but common-sense suggests that with the increased upgrade from Netherland Sewell and the dispute well and truly behind them with a total combined prospective / contingent resource in excess of 3 billion barrels of oil from known discoveries then surely they are worth the 95p they listed at?

Get them on your watch-list and research them. Brokers are sneakily buying them up. As an investment for the next twelve months there could be a 200% upside at the very least.



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  1. rob48000 says:

    Dan, in your opinion which of the 3 current oil players are in the best trading position for the best gain?, Matra, Gkp, RRL or Moil?

    • That depends on the level of risk your willing to take on. All four have the potential to double. GKP are proving up well. MTA are fighting to get production,RRL have big plays & MOIL are in recovery. For a quick gain on good news OVER THE NEXT WEEK OR SO MTA, Long-term GKP/MOIL. Very short-term the next few weeks RRL

  2. philip001 says:

    Good one Dan, I got in on reading this and quick research and already 5.6% up.(5 Hours) More than paid for my years subscription.

    I have a big lump of XEL, do you have any veiws
    Thanks Philip