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

They need to get funding sorted in the near future but this is great news towards getting that.

Afraid I banked nice profit this am. will come back in later.,.

Great discovery......coming good....

Fox Davies note

Max Petroleum (LON:MXP) (BUY, 0.50) (MXP, 22.75p, ▲ (24.66%)) confirmed that initial test results from the Cretaceous reservoir in the UTS-1 discovery well indicate a 55m oil column with 31m of net oil pay. Perforations at depths ranging from 120-128m and 155-158m produced 26oAPI gravity crude oil on pump at indicative rates of approximately 24bopd during a brief clean-up period. The duration of the test was limited due to government regulations and the well will be placed on a 90-day long term production test after all necessary government approvals are obtained in the next few weeks. Based on a probable oil/water contact at 161m as indicated by revised petrophysical analysis and current mapping, the potential oil in place for the Cretaceous reservoir is estimated to be 85-135mmbbl. While other Cretaceous fields in the Pre-Caspian Basin from similar depths report recovery factors of 20-30% of original oil in place, long-term testing and pressure analysis of the discovery well combined with confirmation drilling and a new seismic survey specifically focused on these shallow reservoirs will be needed to more accurately define recoverable oil reserves. Enhanced recovery techniques, such as water flooding, may also be needed to improve recovery from such shallow depths with low reservoir pressure. Additional intervals in the Triassic and Jurassic are currently being tested. A full update will be made as soon as the testing is complete, which is expected in the next several weeks. The Company plans to drill three confirmation wells in the first quarter of 2011 and has tendered for a ZJ-20 shallow rig to drill the wells. The Company also intends to acquire a high-fold 3D seismic survey over the Uytas structure specifically designed to image the shallow reservoirs in the field as soon as practicable. Also, Government approval has been received to extend the trial production project ("TPP") for the Zhana Makat Field for six months to 1 July, 2011. The TPP extension allows the Company to drill two additional Triassic wells in the field, which the Company intends to drill in the first quarter of 2011. The Company has filed an application to convert Zhana Makat to full field development status, which will allow the Company to develop and produce the field for up to 25 years under the terms of the Blocks A&E Licence. The ZJ-30 drilling rig is expected to spud the ALTW-1 exploration well on the West Altykol prospect and the ZJ-40 rig is expected to spud the ASK-1 well on the Asanketken prospect before 1 February 2011, after additional drilling equipment required to drill the wells is received on location. West Altykol is a Triassic prospect with a 4-way closure and Asanketken is a high potential, salt flank Triassic prospect.

Comment: Positive update on Uytas, confirming movable oil and indicating healthy OIP volumes for the Cretaceous reservoirs even though more work is required to ascertain recoverable estimates. Deeper objectives are also being tested which could increase resources estimates for the field. Some delay in the drilling sequence but we have high expectation for the two forthcoming wells ALTW-1 and ASK-1.

market is not frightfully impressed it must be said

Big volume though. 90 day testing, so the punters are bound to have a short attention span.

http://www.stockopedia.co.uk/content/fox-davies-capital-update-featuring-max-petroleum-nighthawk-energy-plc-northern-petroleum-salamander-energy-plc-sterling-energy-cape-plc-paragon-diamonds-52079/

Max Petroleum (LON:MXP) (BUY, 0.50) (MXP, 22.75p, ▲ (24.66%)) confirmed that initial test results from the Cretaceous reservoir in the UTS-1 discovery well indicate a 55m oil column with 31m of net oil pay. Perforations at depths ranging from 120-128m and 155-158m produced 26oAPI gravity crude oil on pump at indicative rates of approximately 24bopd during a brief clean-up period. The duration of the test was limited due to government regulations and the well will be placed on a 90-day long term production test after all necessary government approvals are obtained in the next few weeks. Based on a probable oil/water contact at 161m as indicated by revised petrophysical analysis and current mapping, the potential oil in place for the Cretaceous reservoir is estimated to be 85-135mmbbl. While other Cretaceous fields in the Pre-Caspian Basin from similar depths report recovery factors of 20-30% of original oil in place, long-term testing and pressure analysis of the discovery well combined with confirmation drilling and a new seismic survey specifically focused on these shallow reservoirs will be needed to more accurately define recoverable oil reserves. Enhanced recovery techniques, such as water flooding, may also be needed to improve recovery from such shallow depths with low reservoir pressure. Additional intervals in the Triassic and Jurassic are currently being tested. A full update will be made as soon as the testing is complete, which is expected in the next several weeks. The Company plans to drill three confirmation wells in the first quarter of 2011 and has tendered for a ZJ-20 shallow rig to drill the wells. The Company also intends to acquire a high-fold 3D seismic survey over the Uytas structure specifically designed to image the shallow reservoirs in the field as soon as practicable. Also, Government approval has been received to extend the trial production project ("TPP") for the Zhana Makat Field for six months to 1 July, 2011. The TPP extension allows the Company to drill two additional Triassic wells in the field, which the Company intends to drill in the first quarter of 2011. The Company has filed an application to convert Zhana Makat to full field development status, which will allow the Company to develop and produce the field for up to 25 years under the terms of the Blocks A&E Licence. The ZJ-30 drilling rig is expected to spud the ALTW-1 exploration well on the West Altykol prospect and the ZJ-40 rig is expected to spud the ASK-1 well on the Asanketken prospect before 1 February 2011, after additional drilling equipment required to drill the wells is received on location. West Altykol is a Triassic prospect with a 4-way closure and Asanketken is a high potential, salt flank Triassic prospect.

Comment: Positive update on Uytas, confirming movable oil and indicating healthy OIP volumes for the Cretaceous reservoirs even though more work is required to ascertain recoverable estimates. Deeper objectives are also being tested which could increase resources estimates for the field. Some delay in the drilling sequence but we have high expectation for the two forthcoming wells ALTW-1 and ASK-1.

Same as post #544 then?

think you should have taken 28p cyril..

whoops ref 544 - sorry hc - missed it was in a hurry...

Anyhow plenty of news coming to look fwd to in the near future:

The ZJ-30 drilling rig is expected to spud the ALTW-1 exploration well on the West Altykol prospect and the ZJ-40 rig is expected to spud the ASK-1 well on the Asanketken prospect before 1 February 2011, after additional drilling equipment required to drill the wells is received on location. West Altykol is a Triassic prospect with a 4-way closure and Asanketken is a high potential, salt flank Triassic prospect.

Good 2011 ahead for mxp imo - just need to sort the funding really.

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.