Credit Suisse Investment Banking Pitch Book
Maine GOM exploration update
Excerpts from Maine 11/26/2012 press release
■ Maine updated its ultra-deep exploration and development activities in the
shallow waters of the GOM Shelf and onshore on the Gulf Coast
At Davy Jones No. 1, Maine has recovered to date completion fluids with
weights of approximately 9 and 19 pounds per gallon and is initiating
operations to inject a barite solvent into the formation in order to clean out
the perforations to achieve a measureable flow test
The Lineham Creek exploratory well has encountered hydrocarbon
bearing porous sands above 24,000 feet
■ The Blackbeard West No. 2 ultra-deep exploration well is currently drilling
below 25,200 feet and has encountered additional potential hydrocarbon
bearing sands at approximately 25,000 feet
The Lomond North ultra-deep prospect is currently drilling below 10,700
feet (proposed total depth of 30,000 feet)
Selected press commentary
Maine share price performance since announcement
$13.00
$11.00
CREDIT SUISSE
$9.00
$7.00
$12.45
11/23/12
"Shares of Maine plunged for a second day after the oil and natural gas drilling company
said it is taking longer than expected to develop a well in the Gulf of Mexico.[...] Analysts
say it has been more than a year since the original target date for the flow test, without
any measurable results. Maine's update 'likely did little to improve investor sentiment and
may have raised more questions regarding the well's ability to produce commercial
amounts of gas, JPMorgan analyst Joseph Allman wrote in a research note published
Tuesday. If Maine fails to unclog the well, it potentially may have to abandon it, Allman
stated."
The Associated Press, 11/27/12
"In a note to investors earlier today, Capital One analyst Richard Tullis responded to the news by
lowering his price target on Maine to $9 from $12. Although Maine may eventually be able to
conduct the flow test, the company faces greater risk in light of yesterday's news, wrote Tullis,
who nevertheless maintained an Add rating on the stock. Conversely, RBC Capital earlier today
downgraded Maine to Sector Perform from Outperform, and JPMorgan asserted that the
company has zero equity value, given uncertainty about the commercial viability of the Davy
Jones field."
Theflyonethewall.com, 11/27/12
$9.65
11/26/2012
announcement
11/26/12
$8.18
11/27/12
$8.19
(34.2%)
11/28/12
Shares of Maine [...] tumbled to a three-year low on
Tuesday after a disappointing update on the
company's Davy Jones deep gas prospect off the
Louisiana coast. Shares of Maine [...] were down 11
percent after a 22 percent drop on Monday. The
market passed judgment on what we believe is still a
'science project," Raymond James analyst Andrew
Coleman said, referring to the two weeks of testing of
a well now likely to produce between 10 million and 20
million cubic feet per day-less than half the initial
expectations. Coleman said the Davy Jones project,
which followed a discovery announced in early 2010,
had cost $960 million so far. Analysts at Tudor
Pickering Holt said heavydrilling fluid could be
hindering the well flow, though there was not yet
enough information to determine whether the issue
was 'mechanical or reservoir-related."
Reuters, 11/27/12
Confidential
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