And in a nutshell MM, that is the strategic disadvantage for SSN and all the minnow ASX players - their G&A per Bbl produced in way too high. MOB basically told them that in the loan covenant that pegged the $750K G&A per Qtr (which they regularly go over) or $3M annually
Think about it. At 1,000 bopd (and what has their avg been lately) and assuming they live within the cap of $3M then $8.22/Bbl is G&A costs. TB needs to have a long long look at his business model. The overheads are too high for the sales produced and worse still for the operating netback (i.e. before payment of finance charges, corporate income taxes and G&A).
It was worse when they were operating & participating less capital efficient prospects like NS. They have (had?) a chance to transform themselves with FB but awfully slowly and still it seems without any real operational excellence.
So SSN is going to sell State GC asset in Permian. Good idea. Jettison everything that is
1. not directly related to producing cash from FB
2. requires capital to be spent that is not in FB (i.e. Cane Creek - you don't have the money)
TB, in case RL hasn't pointed it out, the reason why you keep reporting operating losses (apart from the impairments which meant you invested capital that will never earn a return such as Roosevelt, Hawk Springs, even North Stockyard) is the company's overheads are t00 high!! Rightsize and become more efficient.
The compliance listing isn't a big deal as well known already and gunna be fixed by FB PUD development which is gunna happen when the new facility in October is gunna be signed (else you gunna be in deep doodoo).
I suppose one has to temper one's expectations if you choose to hold SSN shares. Gunna be a great AGM when it comes around. Hopefully in Sydney!
SSN Price at posting:
0.3¢ Sentiment: Hold Disclosure: Held
