Maple Syrup

We featured Maple Energy bad week last week in this post (and there was a chunk in the Weekly for subbers, too), so here's the next installment with CEO Rex Canon firing his comeback salvo (geddit?) via Bloomberg.

Aug. 10 (Bloomberg) -- Maple Energy Plc is “still hopeful” it will find oil in the Santa Rosa prospect in the Peruvian jungle, Chief Executive Officer Rex Canon said.

Lima-based Maple will begin a second round of drilling in the prospect in about two weeks, Canon said in a telephone interview today. Maple tumbled 46 percent on Aug. 6 after saying the first round of drilling produced no oil.

“The real news on this particular prospect will not be known until we actually finish drilling,” Canon said. “I think some people maybe didn’t evaluate all the information that is out there” in driving down the stock last week, he said. FULL REPORT HERE

The stock is currently up a tad under 10% in Lima trading at U$2.22, volume 471,000 shares and counting.

Maple Energy (MPLE.L): When a country's pension funds rely on exploration-stage oil companies

This is the week's chart for Maple Energy, a small O&G play based in London and ramping up operations in Peru. It has a small production footprint but is mainly valued on its exploration upside...until now, that is.

On Thursday it announced that its drilling program had hit nothing special and has lucked out. The price of the stock dropped like a stone, of course. Hey, this is the way with small O&G companies...if they don't deliver the goods they dive hard. It's always been this way and it always will be.

But the funniest thing about this is the stupidity of the people that run the Peruvian stock exchange the BVL. When MPLE.L decided to quote on the local bourse last year the idiot suits were so pleased they finally had an O&G listing to play with that they made it a major part of their headline indices. Right now MPLE is a tad under 7% of the whole General Index (IGBVL) and as such is a major part of the whole country's pension funds, as the money tucked away by prudent Peruvians was being gambled (no other word for it) on a tiny oil explorer as part of the stock market indexing of funds....with official approval by the experts that run the exchange!

So when the pension contributors get their statement next month and ask "hey, where's my money gone, dude?" the answer will be "oh....err...this tiny oil company missed on three drills and we lost the whole country 14 squillion because of it". I'd call them dumbasses but that would be an insult to people I've called dumbass in the past, even the delicate flowers of the Motley Dumbass. True financial stupidity for all to see, courtesy of the arrogant suits that mismanage Peru.

There will be more profound talk on MPLE.L in this weekend's IKN Weekly, as subscribers know it's not the first time this company has been mentioned in the Weekly.

Maple Energy (MPLE.L): Rotten to the Core Values

Map of Peru with Pucallpa city marked

If you go over to the core values page at Maple Energy's (MPLE.L) website you read that.....

"We value employee and public safety and respect the environment"

.....as well as other things such as having high ethical standards and being committed to excellence. As is so often the case, this corporate babble isn't worth the pixels it's printed on. The following Youtube video came up on my radar today, thanks to the Red Ucayali blogsite that keeps a close watch on how companies in the jungle region of Peru operate.

It turns out that Maple Energy respects the environment a lot less than it claims in its corporate literature, because a local Pucallpa TV station recorded images of the Maple Energy emergency team mopping up oil pollution from a company pipeline leak. But that's just the start of things, because amongst other things in the report:

• The pipeline is over 50 (yes, fifty) years old

• It gets painted every so often by the company to make it look good, but it doesn't get infrastructure maintenance or any replacement.

• The oil leak recorded by the cameras is the fifth so far this year! Yeah seriously, in the first 10 weeks of 2009 the thing has spilled oil no less than five times.

• The pollution causes permanent environmental damage. As in permanent. Understand the word "permanent"? Good.

• The local chief engineer working for Maple Energy was very defensive when asked a few questions and really refused to give away any information about the leak or the previous spillages.
  

One of the other things that Maple Energy boasts on its website is the good relationship it enjoys with Peru government and officials. Well that one might mean something positive in good old anglosaxon North, but anyone who knows Peru can decipher that code very easily. It's also worth noting that the rich and influential Peruvian Pension Funds jointly hold around 15% of all shares outstanding. So it comes as no surprise to hear in the report that neither Peru's oil watchdog OSINERG nor the Ministry of Energy and Mines has so much as mentioned in passing the problems Maple Energy is causing to the Amazon Basin environment....so far, at least.

So maybe after reading all this you're not as impressed with Maple Energy as you could be and you'd like to complain in your own way. Well as MPLE.L obviously doesn't give much of a damn about things a letter to its IR department representative Alphonso Morante might not be the best method. However, as the IFC (International Finance Corporation), which is the financing arm of the World Bank, is a 6.2% shareholder in Maple Energy you might like to drop them a line and ask them how long they will continue sponsoring a company that uses a 50 year old permanently leaky pipeline that does far more harm than good to its host nation.