Haven't studied the presentation in great detail - would rather have the 10Q and year end accounts as you can't fluff them.
I would agree with @Rob79 that this is the best presentation from SSN in a long long time - if only for the mea culpa and their focus (finally) on efficient capital spending (not the same as capital efficiency - but hey its a start) and no more BS about Hawk Springs, nitrogen, even Cane Creek has been muted.
For me, the highlights are all about the confirmation of capital efficiency (what you have been reading from me ever since SSN made the acquisition announcement and my posting of "SSN transformed" etc). This is where SSN's opportunity lies for the next year. Its a rinse and repeat cycle that will wash the same money for multiple wells in a year (because the payback is quick) without that money going down the drain. Plus the beauty is also in that while production is added i.e. PDP (and now also growing) the Reserves (1P PDP) are also growing and by proving this gives greater confidence in the PDNP number. When success with the lateral development comes (maybe a year off?) then PUD conversion to PDP occurs RAPIDLY.
This presentation talks my kind "stuff" - not 100% there yet (who needs the colorful bubble charts anyway). And for anyone who doubted (and I only need to look to a handful) that this business is about PDP and its relationship with Reserves and Debt this presentation has also laid it out for you!!
What is missing, and I presume will be addressed in 10Q and YE accounts is the key equity raise covenant from MOB. That plan by the way was supposed to be delivered to MOB Aug 15. Slides 26&27 give a hint but not the execution.
When that is resolved, SSN should be quite transparent in how it will generate and invest cash flow to create shareholder value. I might even buy back in again if I see the right mix for value creation.
As always, GFTA
SSN Price at posting:
0.4¢ Sentiment: None Disclosure: Not Held
