Hi Cmon, there is a lot in that post to cover but will have a go. As you say we have a different opinion atm and I expect the qtrly will answer some of the differences.
Re the chart, it is factual and shows increasing production year on year. For many months there appears a concerted effort to suggest production was a problem, all the graph did was put the numbers up for context and I expect it to accurately reflect production for 2015 compared to previous years. If I was bullish I would have included a 2016 estimate however that imo would have fitted your description therefore I elected to stick to facts which can be easily verified from the company announcements.
On the throttling comment, it is based on the March Operational advisory which states
"All wells in the North Stockyard field are currently being produced at lower than maximum capacity due to pipeline constraints and the weak oil price.
All of the 17 drilled in fill wells in North Stockyard have now been fracked and cleaned out and are capable of producing however 6 are currently shut in, waiting on an improvement in the oil price."
To form a view on this and the future I have analysed the individual well performance and applied decline curve to each then consolidated to estimate my numbers and compare to actual. Based on this and also looking at the days producing by well I believe my comments are valid and consistent with the company advice however I have no way of confirming until actual results are known. Models are only as accurate as the parameters included and level of detail included. It is my opinion that applying a standard decline curve on total production is equally dangerous and misleading with respect to 2016 production possibilities. Also some of the original wells are producing above the standard decline which indicates we will need to wait until coy advises if this is sustainable and if/how that effects the overall.
For July I have 31,070 boe however I expect the number will be managed to achieve a result therefore could be more or less depending on oil price and other constraints. Also not sure on my Ironbank 8 number as is not on the ND prodn report for May.
The oil price is important but not the only factor therefore I am less concerned, $50-$60 would be good as it is the same for all the oilers so production cost is more important to me, The volume effect on fixed cost recoveries in the short term should mean the historical cost/bbl are not indicative for future forecasting therefore we will need to wait for the 10q to see how that plays out. My view on cost is based on the March qtr costs and forecast given. The YTD number imo is largely irrelevant as "backward looking" and not reflective of current state production.
I saw the work done to address pipeline constraints as a positive, June had 30 days, May 31 so the drop wasn't huge and the OP higher so no major effect on the bottom line. Also improvements made on flaring/gas production should add increased sales in the future albeit small $$.
Overall I have attempted to support my posts with evidence and also the context of my assumptions and some of my research, personally I am surprised at the negativity here but overall sentiment for O&G is low and very few comments on any of the oilers. If we disagree that's fine and there are plenty worse oilers getting positive posts atm not being challenged as SSN has been.
Whilst the above is all my opinion I am happy to change that opinion based on company specific information I may have overlooked which is always possible.
Cheers
SSN Price at posting:
0.7¢ Sentiment: Hold Disclosure: Held
