I want to profit ... so at this point its just a trade as I think it has overshot on the downside now that the acquisition is completed (still some questions that remain though) and I think the delisting notice is not as big a negative as I first thought (SSN clarified in the AR that it is not a default event for the CRedit Facility). So immediate threat of BK has been nullified.
Yes I think you have the hedge estimate correct ... in profit of $800K now due to oil drop. With now WTI ~$37
($41.50- 37.00) x 147,462 = $663K
($41.20- 37.00) x 113,925 = $478K
($44.09- 37.00) x 141,255 = $1,001K
($45.55- 37.00) x 39,720 = $339K
Total of $2,481K less $500K yields almost $1,981K "profit" now. Always a challenge to figure it out exactly.
Another way to look at it is 442,362 BO has been hedged. SSN saying $41 is the overall average floor. With WTI at $37 then SSN is receiving $4/Bbl worth of hedging. So that's $4/Bbl x 442MBO = $1,768M less $5ooK says its worth $1.268M. This is again higher than $800K so something else is in there also.
Because SSN has not specified any index, I am making the assumption that it is NYMEX WTI. They have also not hedged the differential so be interesting to watch what that does.
GFTA
SSN Price at posting:
0.5¢ Sentiment: Buy Disclosure: Held
