SSN 0.00% 1.5¢ samson oil & gas limited

LOL Rob - you might be right there ... at least the number is...

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    LOL Rob - you might be right there ... at least the number is provided - now all we need is just the reconciliation details of how it got there (lets see if I can work it out from the 10Q)..

    The takeaway for me was $3M in EBITDAX from 100MBoE with price avg of $47.74 for the Qtr. On an annualized basis ($12M) its just a little over 1.5x. On the TTM basis the Dec & Mar Qtrs drag it down but should not have a problem with a TTM EBITDAX of > $5.43M to get under the 3.5x covenant.

    While it doesn't set the world on fire, SSN isn't on life support either. The trick remains how they can make future progress in a low oil price environment (but there is no shortage of those still talking of V shaped recovery for oil price - except its been more than 6 months and no V. Not even a U. Sort of a "W" with a low mid point which we seem to be on the downside of).

    Doug and Sharks make valid points - costs on a BOE basis still need to come down - especially G&A and any production decrease really highlights this issue.

    To an earlier post (think it was Justdb and Rob) where it was noted that SSN mgmt aren't responsible for low oil price etc. etc. IMO that isn't the point. They are responsible for managing through business cycles. An oil production company uses hedges to manage their Capex to their cash flow. Not quite as important for the COP/CVX/XOM of the world given their diversification but critical to a company like SSN (or say TAP which I hold and have been equally critical). Had that discussion here with Buc. Even a giant like CLR managed to screw it up and it cost them a $1B. How smart does HH look now (OK he is still smart 'cos he is worth $Bs and built CLR but he made a big bet on an oil price bottom and cost his shareholders and himself dearly).

    Watch carefully what is happening on the oil price. What is being exposed is the soft "underbelly" of a lot of E&P companies as their hedges roll off and they really can't replace them - new hedges may lock them into certain covenant breaches. So we still keep seeing 2nd lien loans and equity raises being done (and the odd asset sale) to restructure/recapitalize the balance sheet and pay down restrictive debt such as Bank RBLs.

    What is in doubt is current liquidity to develop the projects SSN is flagging in Q4/15 & FY'16.

    Q3 looks pretty quiet except for the likely announcement of the new project they have been negotiating.
 
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