Seriously .. OAS needs the money? As at reported Q3, they had available liquidity of approx $1.3B on the BB Revolver and have no maturities until Feb 2019 on their $1.2B of senior notes (7.25%).
The $16.5M sale is not material to them and the 720 bopd is less than 2% of their reported Q3 production. I'm only guessing but IMO they sold this acreage because it wasn't going to have any capital spent on it (as in their other acreage yielded better RoCE) and so they chose to monetize it at as close to SEC PV10 as someone would pay.
Better to represent the facts. SSN has what about $2-3M of liquidity, $18.9M of debt due in Jan 17 and needs MOB to double their BB Revolver to be able to make the acquisition which will more than double their production and because they are acquiring it cheaply it gives them a shot at being able to continue with WTI at $45Bbl.
Macquarie downgraded OAS and Citi upgraded them (plenty of divergent opinions).
Its a clever move by TB if it all works out but keep it real. Not much longer to wait to find out how it will all play out.
SSN Price at posting:
0.4¢ Sentiment: None Disclosure: Not Held
