We held an exhaustive conference call with Chairman Charlie Wood and CEO Eddie Gonzalez yesterday afternoon in relation to the production slippage at Mayan Energy in contrast to expectations at the beginning of the year and, most importantly, to address the company’s plans going forward.

First things first, management accepted that they are not where we all expected them to be at this stage and this was explained as being a function of permitting delays and also operational issues on the ground. The former is shortly to be resolved once and for all and the latter has been taken in hand through taking over operatorship at the Zink Ranch, Stockdale and Forest Hill fields. Net effect of this is that production should move forward apace now as we progress through August & September.

CEO Eddie Gonzalez was very clear that in the next couple of months a minimum of 200 bopd should be reported (ex Deloro/PQE stake and the commensurate production interest from this holding) with the potential of hitting the initial target set at the beginning of the year of 300 bopd. With the addition of the new recently announced well package, as we move into 2019 the key target of 500 bopd remains an achievable target.

The second and equally important element to us as material holders was reassurance that excluding any new well package acquisitions that the company has ample resources to move into meaningful positive cash flows and thus avoid an additional equity raising. We are pleased to relay that this was resolutely confirmed.

To conclude, we will be working with management in the next couple of weeks with revised estimates and thus produce a full update note. Events on the ground Stateside have proved testing for management and equally frustrating for shareholders. At the current market cap of just under £7m, adjusting for the stake in Petroteq (held via Deloro at present) and Block Energy, for a company still targeting 300-500 bopd as we move through the remainder of 2019 and with netbacks of circa $40 a barrel  at current oil prices, the asymmetric risk/reward skew remains compelling. The mantra of many a retail investor is “in Eddie we trust”. Post the call yesterday, as large holders ourselves (just shy of 3%) we repeat this statement and look forward to him finally delivering the promised production numbers from which a material re-rate in the shares towards our original price target should be put in process.

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• Mayan Energy