Stock on our radar, Maverick Drilling & Exploration Limited (ASX: MAD), announced this morning they may soon upgrade the reserves at Blue Ridge Salt Dome.
Increasing reserves is a large part of our investment thesis for Maverick. However, we expected those increases to come from their new acreage, not the recently upgraded Blue Ridge. As a reminder, Maverick increased Blue Ridge proven reserves 59% and probable reserves by 104% in late June.
Further drilling and seismic tests are required to determine commerciality and sustainability.
Maverick's Executive Chairman, Don Henrich, said "We are very pleased and encouraged by these two new developments… Maverick's internally owned drilling rigs are crewed by personnel who are looking for any new findings in every well we drill. When combined with our vastly experienced geology division we tend to be 'lucky' more often than not."
This announcement was timely, being released on a day when the market was set to jump and more importantly just two days after a disappointing July drilling report. Maverick should release their production report within a week, but going by the drilling report it looks likely that BOPD will be down on the June figure.
In conclusion, the July hiccup in production is overshadowed by this potential new field discovery on Blue Ridge. Maverick remain near the centre of our radar, even after the shares ran up 14% or 3 cents to 25c on this news.
Dean Morel is The Motley Fool's Investment Analyst. In the interests of full disclosure, Dean already owns shares in Maverick Drilling & Exploration, having bought them on June 29th 2011. The Motley Fool's disclosure policy is as sane as they come.
