I half agree with leverage (can't believe I say that).
Roosevelt is clearly (IMO) SFA. This always was an "extension" to the Bakken system and I believe it would considered marginal at best. There is no reason to drill this ... maybe at $100 there is but not till then.
Hawk Springs is a little different. There is likely value there somewhere, but its going to take more capital to find out. The days of "easy" capital are gone for the time being. 2nd Lien notes are at 12% interest rate on PDP Reserves so unless its equity capital and/or convertible notes there's little appetite for risk to find more oil (let alone produce it) in a low oil price world. And that makes it unappealing in a fire sale - those with capital picking over properties still have to see how that value gets unlocked - and IMO that's not evident.
As to whether SSN (shareholder) survives (and prospers) is different - figure out the true equity value remaining after the loan is repaid. Only looking at the accounting books from Sep 30, SSN has a book value of ~$28M for its properties, which is essentially NS. I believe there will be further impairments recognized in the Dec Qtr. Books also have shareholder equity at ~$14.5M and that will reduce further with impairments and cash burn.
I feel the pain. As I've said before, SSN is not by no means alone in the story that its records show (i.e. the books). Formerly "good" businesses have negative shareholder equity (meaning simply the debtors own the company) because of impairments and negative operating cash flow. Just as doubtful as to whether they survive too.
GLTA
SSN Price at posting:
0.4¢ Sentiment: None Disclosure: Not Held
