Wondering if this is good, bad, indifferent or perhaps explains...

Wondering if this is good, bad, indifferent or perhaps explains the production delta I'm seeing.

Dec Qtrly Report notes
".... The properties to be acquired produce approximately 720 bopd from 41 net producing wells...Samson's immediate focus, however, will be on the 17 wells in the PDNP category..."

Definition wise : PDNP reserves are expected to be recovered from completion intervals that are open at the time of the estimate but are not producing (shut-in) or completion intervals that are not yet open but behind existing wells (behind-pipe).

Now this announcement regarding the FB Operations Program
"... Samson will embark on a development program that will be 29 inactive wells ... back to producing status"

We seem to have jumped from 17 PDNP wells to what appears to be 29 PDNP wells -  anyone else see this? Have more wells been shut-in since the original announcement maybe?


Round 1: Workover shut-in wells with mechanical problems (11 wells)
Est Capex: $220K using midpoint of $20K/well
Production uplift total 200 bopd 1st month... no decline advised or EUR given
Completion time ought to be quick and would expect to be all done by end of May(?) Assume 45 days @200 bopd and 9,000 BO added to Qtr 2, 14,400 in Q3 and 13,000 Q4.

Round 2: Workover shut-in horizontal wells with advanced stimulation potential (18 wells)
Est Capex $2,250K using midpoint of $125K/well
Production uplift total 1,400 bopd (~75bopd per well) 1st month... no decline advised or EUR given
Completion time? Let's say they can do 6/mth commencing in June. That would add around 2,100 bopd for Q3 (or 190,000 BO) and say 1,700 bopd Q4 (or 153,000 BO). Could be way off depending on the decline and how (quickly) it will level off. Remember these are not MB/TF type wells.

As a working estimate then, we've spent $2.47M to produce estimated 380,000 BO or ~1,040 bopd. That's a capital efficiency of $2,375/boe. That's extraordinarily good (my original SSN transformed spreadsheet used a marker of $5,000 for the PDNP project). I have updated my spreadsheet in this regard. Again this is dependent on decline analysis being in the ball park and which SSN has not been provided.

Not withstanding the obvious equity raising that must occur, and assuming success with raising $10M (yes only need to raise $5M in equity but MOB wants $10M paid back by June 30th),  from an overall 2016 perspective with WTI averaging $43/Bbl, SSN can achieve the 3.5x Debt/EBITDAX covenant and comfortably pass the interest cover covenant.

Placement and preferred stock I think.