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Mayan Operational update: Zac says Irresponsible I say ramptastic shite c/o Fatty

By Tom Winnifrith, The Sheriff of AIM | Thursday 15 February 2018


 


Mayan Energy (MYN) has not had a placing since it raised £2 million gross at 0.6p in mid November. Circa £1.5 million of that went out of the door at once on commission and an acquisition so the tank must be running kind of dry by now. Hence Align being paid to initiate (bullish) research and seven ramptastic releases in less than three months. Today's is shocking and Nomad Roland "Fatty" Cornish, London's most useless Corporate adviser, should be hung drawn and quartered for signing off on it.

The company boasts that its latest well Gilbreath #15 produced 51 barrels of oil within initial 24 hours of operation. That is meaningless shite. The first day's output is no guide at all to anything. Output normally falls sharply from there and to know whether this well is worth a row of beans you need weeks of data. This is just a ramp.

Natch it has worked given how thick most investors in AIM resource stocks are - the morons have bid the stock up by 16% to 0.68p-0.72p valuing this worthless crock of shite at £8.2 million.

The company says that "The Company is in a position financially to complete this programme with current resources and cash flow available." Which means that it does not have enough cash to do anything else or indeed pay its (bloated) PLC costs for any length of time.

In other words this is a shameless pre-placing ramp. The City's No 1 oil analyst Zac "The Knife" Phillips puts it this way:

One Data Point Does Not a Trend Make:

We find it curious that today’s announcement follows so quickly on from the last and that it contains very little in the way of meaningful information that can be used to advance the understanding of the potential of the well, and by proxy, the potential of the programme that is planned. Management should know that the initial performance of any well can’t be taken as a guide for the continued performance, that only study over a period of time, elucidating a trend, is the only way to properly understand the impact of a programme on recoverability.

In short, you can’t understand the performance with confidence over the performance of a field from production over a small time periods, especially 24 hours. We will wait until the programme has been completed and results of that study announced and independently verified before we get too carried away.

We have been here before with this company when it was Northcote Energy, and that ended badly, and now with this today, it appears to be a very unwelcome trend. In our opinion, the common theme is a failure to grasp/focus on the engineering and technical performance, which to our mind is demonstrated by the glee with which one 24 period has been grasped.

As they say: “the trend is your friend,” and this, in the form of decline curve analysis, is what forms the basis for the SPE’s PRMS system, and if it good enough for them, it should be more than good enough for Mayan. Ultimately, while the performance may well match these initial results, one data point does not a trend make, which makes this announcement rash, at best, but definitely irresponsible.

Ends.

I cannot for the life of me understand why Roland "Fatty" Cornish is allowed by the poltroons at AIM Regulation to continue as a Nomad. Was he best mates with someone senior when they were at Oxford together or in the same dorm at boarding school before that? Yet again Fatty has signed off on a statement that simply fails to convey a true picture to investors. FFS Fatty, I know that you think that your job is trying to stuff 7,000 calories a day down your throat but what you are paid to do is to ensure that releases are responsible and give a fair impression of what is happening and yet again you have failed. Or maybe you don't care? You are happy to take cash from anyone who wants to ramp their shares ahead of a placing.

For that is what Mayan is up to, yet again. Its shares are grossly overvalued in terms of any sensible DCF model and ahead of an inevitable placing. Sell.


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