SSN 0.00% 1.5¢ samson oil & gas limited

Right V-H and .... 1. Bank is also going to set the BB with the...

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    Right V-H and ....

    1. Bank is also going to set the BB with the next re-determination (Oct) in mind in that SSN will "produce" 6 months of these Reserves so they wont get "credit" for that in this redetermination.

    2. Technically minimal capital required as they have 7 wells behind pipe that can be "turned on" - but that's the Operator's decision. The rest of the asset base doesn't really factor into "Reserves" at this point.

    3. So that makes the decline even more relevant - what is the expectation of remaining Reserves in Oct that forms the basis for their BB to be set now that fits with the Bank's coverage model. How much risk do they take? (Operator may decide to not produce until WTI is $70/bbl - whats the PDNP BB then?)

    4. Hedging. Risk management 101. I believe it is MOB that is SSN's counterparty. Could it be that monetizing the hedge was done and immediately applied against the BB??

    5. Cash flow & EBITDAX - well you've seen that discussion no doubt - and with little hedging (not sure about the protection that the deferred Puts really provide)

    Agree that the risk increased and its a bet on oil price movement. An open question is what price is Slawson saying they want before they turn on those 7 wells?

    Hasn't been much discussion here on the Op Advisory ...
 
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