Cmon, I suspect the muted response in the US was because the quarterly was good and largely disproves the overwhelming negativity over the past few months. If the EBIDAX is $3m as reported we know the depreciation rate $21.94/boe from the March qtr and interest from this qtrly. That gives a profit for the quarter of $700k for the quarter by my calcs but not withstanding any impairments if any.
The $1.8m development for "Samson's share of the North Stockyard project drilling program" was funded from cash generated from operations and they paid a bit back off the debt. On that I suspect it was to cover bases and make sure the covenant was in line. The liquidity forecast for Sept. Qtr was also given yesterday so gives a clear indication of how the current projects will be funded imo.
The Ward wells are cheap (around $300k for 25% WI as per company reports) so there is plenty scope for a measured programme within the cash margins generated from the existing wells even at the low OP. Any dip in OP and they can cash in some more hedges, if it goes up take some more hedge cover and rinse and repeat until things pick up.
Well availability is up and if that can continue will provide low cost production growth in 2016 FY. It is true production depletes reserves but it turns reserves into cash which has currently more value and the net effect to balance sheet could be positive if money spent on worth while projects.
To balance the above the market imo is still not interested in the oilers which is not surprising due to OP and also some of the other companies quarterlies who are not in as good shape, not surprisingly there is little commentary atm on the cashflow statements on most oilers and some don't even present them which I don't understand how S/h's are able to form an opinion on their investment (gamble?)
All my opinion only
Cheers
SSN Price at posting:
0.7¢ Sentiment: Hold Disclosure: Held
