Welcome to the new thread for Max Petroleum. Here's a link to the MXP web site and a presentation that everyone should read.

http://www.maxpetroleum.com/companypresentations.asp

http://brokermandaniel.com/2011/01/06/max-petroleum-take-note-the-penny-will-drop-here/

market unimpressed simply because the discovery is derisory-and over the years i have seen other oil plays P+A finds of this sixe .Not always size that decides price; but rather what is recoverable pref. on cold flow..Hardly commercially viable to my way of thinking . l bought a shedload of these 14 and 16p and forever the % player sold the lot on beack of RNS when it leapt to a tad shy of 30p Whether it provides a pathway to hydrocarbon migration to other basins is a different matter .....but 24 b/d in testing , crippling gearing. and now more dilution ,,,,,Forget it !!,.....ln addition host country is hardly amiable in dealing with oilees

http://uk.finance.yahoo.com/q/ao?s=MXP.L

Back to sub 20's, I think.

just what i thought this am, so sold out and back in at right time.,.

yep sold all mine - looking to get back in at lower sp obviously - already lower of course sub 20p be nice - but dont want to miss jan rns's so may buy back a little over 20p so not to miss jan news - gl

They will drill 2 more prospects at the start of FEB......so could be a while till news......weeks so will the price rise from here or fall.

Both.

Stock to Watch: Max Petroleum
Thu, 06/01/2011 - 14:41 | Edmond Jackson

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

The AIM-listed shares in Kazakh-oriented oil explorer Max Petroleum (MXP) initially jumped nearly 30% near 30p today (Thursday 6 January) in response to an operational update which has confirmed an oil discovery in the UTS-1 well, indicating a 55-metre oil column with 31 metres of net oil pay.

It's early days, but it looks a useful discovery with scope to show Max can indeed make commercial progress at this crucial time financially, as further equity must be raised.

Some 24 barrels a day were achieved, although time was limited by government regulations and the well is to be put on a 90-day production test once government approval is granted. Oil in place is estimated at 85-135 million barrels in the Cretaceous intervals and more assessment needed to determine what is recoverable.

This likely explains why the share price rise was reversed by mid-morning amid busy trading.

While Max is indeed a high-risk share right now, I would not cynically dismiss it as a pump-and-dump play, but keep a close watch for news evolving in weeks ahead. A full update will be given on this UTS-1 well, including the Triassic and Jurassic intervals also being tested, in due course. Three further confirmation wells are planned in the first quarter of 2011.

I drew attention last October at 20p, questioning if Max was finally close to unlocking its huge potential in Kazakhstan, a country with prolific hydrocarbons. However, I also cautioned on the company's financial situation.

The end-September balance sheet, as revealed in the 17 December interim results, showed balance sheet cash of $4.6 million (2.96 million) at end-September relative to $3.8 million at end-March; however current assets of $25.2 million were offset by current liabilities of $92.9 million of which $69.8 million was short-term debt. Additionally, there were $75.9 million longer-term borrowings, all in context of $31.7 million net assets which included $1,400 million exploration and appraisal expenditure capitalised.

Relative to a market capitalisation over $150 million equivalent, it's the kind of balance sheet to make any conservative investor run for the hills; but such is the potential to transform reserves, Max's asset position can alter radically.

So the near-term gamble is whether Max can get over its cash hurdle by demonstrating enough progress to secure equity; then medium-term, prove up the deeper prospects that have always been the attraction.

Additional equity would enable Max to defer debt maturities for two years or so, after the end of a key exploration period.

The interim statement suggested an equity offering would go ahead as soon as regulatory approval is given. Perhaps some interested buyers think they will be able to get shares cheaper in a placing or open offer; but if a rights issue is also involved then private investors may do best by being actual holders, in order to benefit from any discounted share offer.

Other news to watch for in the next three months will be two trial production wells for the Zhana Makat Field. Government approval has been received and the company has applied to convert to full field development status, enabling up to 25 years' production.

Drilling will also start this month on two Triassic prospects: the ALTW-1 exploration well on the West Altykol prospect and the ASK-1 well on the Asanketken prospect, which is seen as high potential.

At interims, management said it is generating over $4.5 million a month on current production of about 2,000 barrels of oil a day; and various initiatives are underway to boost near-term production; however the rate of drilling also looks cash gobbling.

Nearly twice the amount of cash generated from operations in the six months to end-September was spent on exploration and appraisal expenditure, and there was also tax to pay. So net cash used was $10.5 million versus $3.4 million generated with the gap met by $11.3 million borrowings - also to help settle $3.5 million interest payments. A situation of increasing debt to pay debt interest obviously cannot last long.

The exploration/appraisal costs differ somewhat in the income statement, cited at $5.2 million although there were also $7.9 million administrative expenses during Max's first half, up from $6.9 million like-for-like. Altogether, there was a $13.3 million loss on $24.7 million revenue. While the auditors did not formerly qualify the interim accounts, they noted the financing need indicates "existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern".

Yet it is just this tightness of Max's financial situation relative to potential in the year ahead, to get results with its deep drilling also shallower production, that creates appeal for high risk/reward traders. Within a very approximate profile of potentially doubling your money versus losing the lot, if progress can firm up recoverable prospects and an equity financing is achieved then it will define probability on the upside.

Adding further to the sense of an intriguing gamble, Max is not experiencing the kind of regulatory shenanigans that have thwarted LSE:RPL:Regal Petroleum in the Ukraine.

Last September, the Supreme Court of Kazakhstan reversed the rulings of lower courts regarding a tax claim, and put the case up for reconsideration. It is a typical kind of hurdle that companies encounter amid the "resources nationalism" that has reared up with high commodity prices, but at least the Kazakhstan elite is being pragmatic with foreign investors.

Despite a risk that new institutions negotiate down the price of a share offer, say to about 15p, the commercial progress and improved financial profile implied by additional equity should be supportive for the market price - so I would not fear Max shares falling from 22p due to a ruthless City. The crux depends on further news in the near term, and today's is a decent start.

Just my observation, but I have rarely seen a Rights Issue in the minnow stocks. Nearly always they seem to issue extra equity (which is cheap & quick to administer), which in the short term is definite dilution, so worrying about holding stock to qualify for the Rights is misleading, imo.

dont forget some estimates that mxp have up to 5billion barrels oil - every confidence here - hope to top up more soon - dont forget where mxp are - the country has huge oil reserves ranked 11th in the world - some interesting docs here and within site lol
https://www.cia.gov/library/publications/the-world-factbook/fields/2176.html?countryName=Kazakhstan&countryCode=kz&regionCode=caskz

1. Max Petroleum (MXP)

Oilbarrell.com summed this up well yesterday: Max Petroleum is now one year into its 13-well post-salt drilling campaign on Blocks A&E in Kazakhstan and the jury is still out on how to rate the campaign. Twelve months ago, when Max spudded the first well, BOR-1, the shares were trading at 20 pence each. Now, with seven wells drilled to date and two discoveries in the bag, the shares are trading at 21.75 pence.

Admittedly they have had their share of dusters which have kept the share prices feet on the ground, but Max are producing.

Target: Another good hit should take it to 40p, a large hit or two and this should be worth upwards of 50-60p in the next 3-6 months.

good day today - expecting more soon - gla

related

http://www.hydrocarbons-technology.com/projects/tengiz_chevr_oil/

from the twilight zone - lol

'Also from the website: "In the period from 17th to 21st of January the Ministry negotiated the terms of how to save the contract with that 48 rule-breakers.". So it seems that MXP have already negotiated with the Kazak authorities. Presumably they came to some sort of amicable arragement else the SP would have well and truly tanked by now.'

very good news....

BRIEF-Max Petroleum completes UTS-1 well testing
Mon, 31st Jan 2011 07:20

LONDON, Jan 31 (Reuters) - Max Petroleum PLC:

* Completed testing of the UTS-1 well in the Uytas field, successfully

producing 27 degree api oil

* Well will be placed on a 90-day production test after all necessary

government approvals are obtained

* Jurassic reservoirs in the well are of excellent quality, with porosity

averaging 29 percent

* This test, combined with the large volume of oil in cretaceous, confirms

Uytas as a significant post-salt discovery

((London Equities Newsroom; +44 20 7542 7717))

excellent - shows great confidence et cetera

http://www.investegate.co.uk/Article.aspx?id=201102020700055244A

Extension of credit facility and fund raising now coming. Early march for the new shares. Stay out until then, imo.

Best thing is to hold if you are already in....like myself...

Interesting that they haven't announced the result of the book building for the placement.

My experience is that it completes later that day (ie yesterday)
With the sp heading south maybe they are struggling to get it done. With JJB now under their placing price it is evedent that market conditions at this very moment are very poor.