Where to ...supply base?, page-24

What does being bumped out of the All Ords have to do with MRM's business?

It might have had some support from index funds buying everything that's on it, but I doubt any fund manager or analyst would be recommending MRM lately. No one recommend businesses that's in a tough spot; they always sing praises of it once it's up and up and up.

As to selling the bases... true it'd be better for the business if they were to have kept it. But given the current environment and balance sheet stress, holding on to assets that earned about $1M last year [6 months?] when you can flog it off for $52M and pleases the bankers. That makes a lot of sense I think.

True that if MRM were to have kept it, wait for the good time to come back etc... but we're putting out fire at the moment so given the choice of dilutive cap raising or a quick cash injection on currently under-performing asset. It's good for existing shareholders.

That and there are still two bases in Singapore and Indonesia.

To me, the investment premise here is pretty simple. Will MRM sink and go bankrupt? Very unlikely now that the bankers are pushed between waiting for a couple years to get all their money back or go down with MRM.

Depends on how the oil prices play out from OPEC meeting with US Shale producers to rig the market. But they're all feeling this self-imposed pain for two years now, so US shalers better play nice or watch OPEC sending them broke again.

Given that average daily consumption is about 110M barrel, shale producers recently increase its inventories by 8.5M bbl... the idea of some kind of oil glut is just ridiculous.

But the market does see any increase inventory as a glut, and if OPEC can't convince US shaler to be reasonable and bear some of the burden rather than full blown extraction... the game might continue once they meet again in May.

But yea, pumping less to make the same or higher profit... or pump more and sell at half the price. Doesn't take genius to figure out what they'd do over the next year or two.


But back to MRM... having written down some $500M in asset value, flogging off about $100M in asset sales. High probability of it surviving another couple of years yet... oil market cannot be this low for too much longer... How much would MRM's book value be once oil picks up, the assets become more valuable and might be written up [or not, depends on how they want to play with the ATO]... It's not a $90M dollar that's for sure.