Madagascar Oil are one that we here are watching very closely. THEY ARE A MULTI BILLION BARREL OIL PLAY. Fully funded through to 2014. Moil are currently coming off an all time low of 16.68p. 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 18.5p! This is an absolute steal at the moment. Once we get into the fourth quarter then company news on their assets/discoveries/drills should begin to bring back the value that has been lost, mainly due to licence wrangling with the Madagascan government.
All outstanding issues with the Madagascan Government regarding their three exploration blocks was successfully resolved, as announced on the 5th April this year. There are no further disputes with the Madagascan Government. Moil are back on track & Under Starters Orders.
There are several reasons why investors should take a very close look into the company. The main one being that 77% of Madagascar Oil shares are owned by Institutions. That leaves 23% on the open market. Any buying trends will significantly increase the stock. Remember Institutions have paid considerably more than the 18.5p they currently stand at. The recent placing this year on 22 Feb 2012 came in at 28p. It was fully subscribed. Private investors can buy at a significant discount to February’s placing of 28p, never mind the IPO price of 95p.
As the markets begin to settle down then so to will Moil they should rise significantly as they close in on “First Oil” at the end of this year Q4 2012. Remember the oil has already been discovered. It’s only a question of time before they begin to rise substantially.
Moil are focused on the development of heavy oil & conventional oil & gas deposits in five onshore blocks in Madagascar. OIP figures range from 1.1 billion right through to best case scenarios in excess of 6 billion barrels. They own significant exploration and development rights for oil and gas in Madagascar, in the last five years the Group’s total acreage & 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. (Total E+P have 60% of the Bemolanga block and are operator. Total are big hitters).
Moil are known by BMD to be expediting their work programme, playing catch-up after lost time (due to the Force-Majeure) 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. Moil should also be releasing the Airborne Gravity Survey analysis, that was commissioned in 2011, any time now.
It’s a long-term project but the benefits to investors could be absolutely mouth-watering. The company say the fields have the capacity to be producing oil for the next 20/50 years peaking at 150,000/300,000 bopd. This would put the discoveries in the top 10 in the world.
Large players are looking for exposure to East Africa, which is seen as a hot-spot after a string of major gas discoveries in the past year including off the coast of Mozambique and Tanzania, which lie across the Mozambique Channel from Madagascar. Madagascar Oil’s Laurie Hunter said in a recent interview. “We have had interest. Large and small. Let’s just say from as large as you can think of, interest from big oil companies is coming our way from the Mozambique Channel. Madagascar is on trend with East Africa. I’m sitting there waiting for people to wake up,” An official process to select a partner will start when Madagascar Oil has all the data linked to the blocks in place, Laurie added. That should tell you that there are partners lining up.
Shares in some small explorers in East Africa have soared, and British explorer Cove Energy is now in takeover. Madagascar Oil’s shares, however, have fallen to 18.5p from a high of 52.50P in July 2011. What happened to Cove will almost certainly happen here. They’ll get taken out.
In September 2011 Netherland Sewell & Associates upgraded the company’s asset Tsimiroro. Contingent resources have increased by over 70%. There isn’t a company on the market that hasn’t taken a hit during the European debt crisis. But there’s none as well placed as Madagascar to realise massive gains for Private Investors. Some in-house Brokerage price targets are in excess of 250p!
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