re ann 14 july, page-3

Hi aca,
Decided it was best to pop over to the MDA area to make further comment than to be talking about this on the GGP page.

Have just had another look at that wording in the announcement from the 14th.

"The Company has been in discussion with parties on potential farm-ins and/or direct acquisition. The Company anticipates holding meetings with interested parties over the coming week, to determine the likelihood of reaching terms for an acquisition."

Now I preface the following comments with the warning that my comments coming up are just some wild surmises and daydreaming and unlikely to be validated by what is actually decided and announced in this coming week.

Now at this stage we have no indication that MDA has any real money. It does have some cashflow from its 9% of Bullseye but that is not huge.
It's only chance of having money is if it has managed to offload some of that large number of shortfall offerings it had from April. So that could be anywhere from zero $s to several million $s.

So there is always that possible boost to funds but given the market it seems unlikely that they will have been very successful. But it may happen.

Yet it is talking about farmins and / or an acquisition.

So is it looking at using its 9% stake in Bullseye to provide the funding or leverage ?

Here are some scenarios to ponder :

SITUATION : MDA through its association with QPN at Bullseye is aware that QPN has a number of prospects being considered in California and would like to get in on the action

(1st Possibility) = MDA agrees to sell its 9% stake in Bullseye to Salinas Energy (SAE) for say $US 5 million in return for getting a 32.5% farmin stake in SAE's Osso Bucco project (potential 17.6 mmbo) and similar stake in SAE's Merlot prospect (potential 46 mmbo)
So then Operator SAE (40%), MDA (32.5%), Statesman Resources (15%), QPN (12.5%)

(2nd Possibility) = MDA acquires QPN's 5% stake in Bullseye for about US$3 million to give MDA 14% of Bullseye. (Has gained bank loan on 9% share of Bullseye to fund acquisition)
Based on an oil flow of say 1,000 bopd and a nett poo of US$50 a barrel then that would give MDA a weekly cashflow of about US$50,000 per week or over US$2.5 million per year.
Then also arranges farmin agreement based on increased cashflow and 14% share of Bullseye to take a 20% share in Guijarral Hills #1 and possible further arrangements on other prospects.
So the Operator Nations Petroleum (30%), SAE (30%), QPN (20%), MDA (20%)

(3rd Possibility) well many other possibilitites really but there are numerous combinations and permutations.

They know what they are. We just have to await announcements.