Borat's Black Gold...

28th Feb '09 by Murakami

4 comments 1485 reads

Llisted on London’s AIM market in October 2005.
Independent oil and gas exploration, development and production company, with an initial focus on Kazakhstan which apparently offers huge hydrocarbon potential
In June 2008, Max Petroleum had launched a formal farmout process to seek partners to seek partners to share the risk and fund its three-year exploration programme.
The company had in September said it received 'multiple' offers for two of its Kazakhstan licences and that it expected to reach a commercial deal on one or both licences after evaluating the offers, but unfortunately these deals didn't come through and the company got into a bit of a pickle it seems - http://www.forbes.com/feeds/afx/2008/12/23/afx5855458.html
Since then, the CEO has left and its focus has apparently been on its efforts to fund its 2009-2010 drilling programme through an increase in the borrowing base under its existing credit facility with Macquarie Bank Ltd.
It recently announced that it had enhanced its senior credit facility to $100 million from $50 million, so it seems to be in better shape.

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Murakami

28th Feb '09

As mentioned, the company saw some recent management changes: Mark Johnson replaced as CEO by James A Jeffs and Robert B Holland III acting as Executive Co-Chairmen. James A Jeffs commented, "We thank Mark for his contributions to the Company over the last year, particularly his contributions toward streamlining the organization, cost savings initiatives which will continue to enhance the Company's operational effectiveness in the future, as well as with this transition. The Board of Directors wishes him the best in his future endeavours."

Feels like pretty standard corporate-speak - anyone know if there was anything more to it than this?

http://www.stockopedia.com/news/announcement/MXP/090206mxp8999m.htm

Gradders73

2nd Mar '09

Wild West investing

Max Petroleum is very well known in the city for all the wrong reasons. The underlying story is about tapping the mineral wealth of Kazakhstan, but while this is enormous, it's more in ore and natural gas than oil. The oil is heavy and and it's got very high sulphur content so, it's expensive. There are (or were) a few individuals with large holdings who have done some creative things in the past, to put it politely and seem to spend more time trying to guarantee their wealth rather than the job at hand.

I am bullish on Kazakhstan, they will survive and prosper but the relationship with the Chinese is crucial. So, I am bullish on Kazakhstan and on oil prices, but I would rather gamble on horse racing than this stock, it may go to 100 but it could easily drop off a cliff and these shares were suspended about a year ago owing to the suspicious activities of the shareholders, so don't count on being able to sell.

Stocktaculous

Sounds quite like Sibir Energy then! It would be worth a go but for the all-important management/governance!!

The Chinese have got the cheque books open for Kazakhstan, They will lend cheaply but in exchange for project work, which is not the preferred option for Kazakhstan. However, if the west isn't willing to lend, they will be forced into the hands of the Chinese and then these sorts of companies are toast. So, it's too much of a shot in the dark in my view.

Borat's Black Gold...

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Murakami

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