Good on you MS for hanging in there. That was a tremendous spike up. Be ideal for SSN to close above $1 (if only for pysch reasons).
Assuming it goes through as planned by TB, he has managed to apparently more than double the value of the company without diluting shareholders. Clearly the market approves the move.
What I would dearly love to see released to the market is a proforma what the acquisition will do to the financial statements at closing and then going forward through 2016. Obviously debt will double, Reserves will more than double (excluding PUD), MC has more than doubled, Shareholder equity likely less than doubled (from the balance sheet view), production more than doubled, Debt/EBITDAX will be tricky and needs the proforma to give confidence (in the financials).
Trying to find more on OAS motivation for the sale (and I assume they are the seller). They clearly state their desire to be FCF positive - so $16.5M is about 2 high intensity Bakken Hz wells for them. OAS is not a distressed seller (they have over $1.3B in liquidity available) and the price TB paid looks like a firesale price. The only thing I can think of as to why is that these acres have a high PUD component and maybe the 5 year clock on OAS for turning PUD to PDP was about to run out and they would "lose" those Reserves from the books. SSN clearly has stated its intent to develop in 5 years AND MORE IMPORTANTLY, would have to show (1) access to capital to develop (i.e. the BB) and (2) that developing these acres are economic at current strip.
Well done and GL
SSN Price at posting:
0.5¢ Sentiment: None Disclosure: Not Held
