Max Petroleum is a stock that's been through some tough times. Back in 2007, it sacked the CEO, chief operating officer, and a number of other staff after a big scandal about staff share options [1] .
And this year, its results showed the most horrible loss - some USD 113.9m - after it had to renegotiate its mezzanine finance from Macquarie Bank.
But look forward, and 2010 could be an exciting year for Max Petroleum. The company seems to have spent some of 2009 in newsflow hibernation, just data crunching away on its 3D seismic data, which is the oil company's equivalent of locking yourself in a darkened bedroom to play computer games. Except that at the end, you may get a pointer to a massive oil discovery, rather than a 'high score' screen.
Now all this data crunching and interpretation of 3D seismic data doesn't make great headlines but as Oilbarrel points out, it's crucial to the massive potential of the company. It should not only give MXP guidance on where to drill, but it will also deliver real leverage when MXP is negotiating with potential farm-in partners. With one well a month planned for 2010, the dearth of newsflow we've had over the past year is likely to change [2] .
The interesting thing is that Max Petroleum's prospects in the Pre-Caspian basin have been surveyed before and are, indeed, highly productive; the massive Tengiz field is 40 km south of MXP's prospects. But this particular area has never before been surveyed using 3D seismic [3] . So MXP is bringing a new technology to a proven productive basin - which can be a promising way to find oil.
The company has two main prospective areas, pre-salt and post-salt onshore Kazakhstan, in Blocks A and E, and also holds the licence for the producing Astrakhanskiy field. It has been interpreting 5,240 square kilometres of 3D seismic (its licence area is 13,500 sq km) for this area, and has now identified a number of prospects and defined its near term drilling programme. Which given a success rate so far of 20 out of 27 wells [4] gives it a good chance of significantly increasing its resources base.
The whole pre-Caspian area has a huge salt layer dividing older and newer rocks. MXP's management believes all…
