Sep 25, 2017
Metals markets are in a correction. While the DSI never hit high numbers, the COTs climbed into nosebleed territory with small speculators once again convinced they could get rich overnight by buying at the highest prices in the last year. People who want to buy at the top and sell at the bottom always lose money and always want to blame manipulation. It’s not manipulation, it’s stupidity.
Metals tend to make bottoms twice a year at least for the last few years. We had a bottom in July after a short correction. I said so. Lately the markets turned down after the full moon on September 6th. The COTs still reflect a high degree of optimism on the part of small speculators and until that optimism is washed out, the markets will continue lower. It could continue until December. Both the DSI and the COTs will show when the time to buy is right.
I wrote about Molori Energy back in July. Read it.
They had plans on drilling and fracking their first well into the Red Cave formation some 1,500 feet deep. They are two months behind schedule.
The well is cheap, about $300,000 to finance. Molori has a 25% participation in their partnership with Ponderosa Energy in the North Texas oil fields.
The partnership has been working on adding additional ground and postponed spudding the well until just recently. It’s been drilled and results will come out shortly. The 2nd well is in progress and results will come out at about the same time.
As I explained back in July, it will cost the partnership about $300,000 to drill, frack and bring into production each well. The testing will be announced in two segments. Shortly the partnership will be announcing the results of drilling of the first two wells pre-fracking. Look for it to be in the range of 20, 25 BOEPD. Based on whatever the first results are, they will make a decision to frack or to not frack. When they frack, look for an additional 20-25 BOEPD.
Here is the math. A flowing barrel per day is worth about $60,000 in today’s market in that area. If it costs the partnership $300,000 to complete a well that delivers 25 BOEPD, it costs $12,000 per barrel. If each well delivers 50 BOEPD, it costs $6,000 per barrel. That makes the return on investment between 400% and 900%. In Mexico that is called “El Goodo Dealo.”
Anything above 10 BOEPD will be a home run. 40 BOEPD will be a home run with the bases loaded and in the very slight chance of 100 BOEPD, it will be a home run in the 9th inning of the tied up World Series with the bases loaded.
Molori Energy is an advertiser. I own shares. Do your own due diligence.
MOL-V $.46 (Sep 22, 2017)
MOLOF OTCBB 32.3 million shares
Molori Energy website