Of course Buc. And we'll see if its just a game wont we with the Yahoos and donuts appearing.
I'll re-paste the the slide from the beginning of the thread with the updated numbers from the filed 10-Q and breakout of oil and gas. But understand EVERYTHING is backward looking (from price averages in Reserves NPV to Reserve reservoir estimates to production history to well you name it there is some model based on history & behavior).
Any negative interpretation is that of the reader not the poster. I'm not saying that $3.87 Cash Margin for MRQ is good, bad or indifferent. Same goes for the projection.
Tried to make it a little easier to understand - the Black numbers are reported - so Q4 numbers from SSN and pricing from PAA. The PAA WTI price drives the PAA WBS price. Jan is done (hence in black). Feb WTI estimate is $50 and Mar is $55. Everything else just uses the same ratio as observed in Q4.
There is some question around hedging - can SSN monetize all at once in Mar Qtr or are they annualized (as in equally spread each month). I used a monthly spread - but not sure on the numbers.
Costs are extrapolated from Q4. If SSN further reduces G&A then great - but nothing concrete yet reported. LOE+Taxes is estimated using best guess.
Production is cranked up to achieve a 1,121 boepd Qtr avg - same as at beginning of the thread. Higher or lower - matters not to me.
There is no bullshit or black magic. There is no upramping or downramping or irrational negative outcome. Its just data and its most recent available.
Then you get to what IMO is really important but not discussed. Just like the song...
Because you know I'm all about that bass (debt),
'Bout that (debt), no treble (credit)
I'm all 'bout that (debt), 'bout that (debt), no (credit)
I'm all 'bout that (debt), 'bout that (debt), no (credit)
I'm all 'bout that (debt), 'bout that (debt)
It is laid out in the 10-Q. To the name calling antagonist the guys at MOB are probably very smart - hence they went with 3.5 to begin with. I think they are also smart enough to understand the pricing relationships that underpin the BB. There is a re-determination that comes up in the Jun qtr (I think). Breathing space. No need for them to do anything rash.
A useful read as a reminder....
http://www.ogfj.com/articles/print/...tise-relationships/reserve-based-finance.html
A fair number of E&P companies have tripped covenants or have flagged that the next Qtr will likely see them do so. One of my other holdings signaled that in their 10-Q - and they have a Debt/EBITDAX multiple of 4.25 so much higher leverage (and $1.5B BB).
As far as profit/loss is concerned - you can't be serious. I can't even get the EBITDAX reconciliation to GAAP on the 10Q to get to the number that tripped the covenant. Because I am interested, I emailed SSN hoping that Robyn Lamont will provide the reconciliation. I guess with no impairments in the Qtr and no Capex they could show a profit - unlikely but then again oil zooming to $100 and SSN producing at 1,500 boepd and I'm sure it would be profitable. Look at the cash margin improvement from Jan/Feb/Mar.
Anything's possible.
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