Thanks Leverage and Strazza for your summaries of the SH...

Thanks Leverage and Strazza for your summaries of the SH meetings
I would add my comments as such -
Terry Barr as always, was professional, relaxed, upfront, knowledgable, concessional and positive without being salesman like

Points of Interest

• The oil Industry currently pours 24 billion into the Bakken per year because of the extreme and rapidly growing confidence in this region
• The average rate of return on investment within the Bakken is 60% which is constantly being tested and evaluated and is always found to be reliable
• SSN will not need to get back in the equity market any time soon
• The Australian equity market does not currently appreciate the value and increasing importance of the Bakken
• SSN has a substantial increase in production coming in the next weeks
• 3P Reserves should be significantly increased with the 3 Forks production results
• Re-rating of SSN should come with either or both the 3 Forks and Rainbow results
• The SSN operating cost of a BOE is US $20 and the capital cost in also US $20 -  i.e. US $40 per BOE
• Currently SSN has estimated each BOE has a US $70 profit margin
• SSN are breaking even on a cost basis currently on 500 BOE/day

• North Stockyard Project ( with the Three Forks drilling ) combined with the Rainbow Project will take approximately two and a half years to complete as currently planned which should continue to consolidate and underpin the future SP of SSN
• The Three Forks wells are longer with bigger fraccs & have virgin reservoir pressure which should equate to IP and ongoing production rates equivalent to the Middle Bakken wells
• Blackdog continues to be a monster well, grossing

US $ 10,000,000 to date, which is twice the rate and the numbers that it was configured for.

• Billabong is predicted to be similar to Blackdog as a producer
• Gladys and Blackdog thus far have had the biggest fraccs.
• Matilda Bay 1 has been subject to a mechanical problem which will be fixed in the near term
• IP rates on Bootleg 4 and 5 will be probably known after Gladys
• Fraccing of Bootleg 6 and 7 and 8 will occur in short term

• Terry is addressing the task of acquiring new land prospects – the forward looking plan is to keep the rig out there for 2-3 years, increase production and fund ongoing projects through debt financing - to quote Terry “Why have acres if you can’t afford to drill them’
• First IP rate known next will probably be Gladys, it will be flowed back within the next couple of weeks ( although Continental are not very forth coming with information, and provide ‘one liners’ )

• The first level of log pay ( out of three ) found in the Bluff drill will be tested in the next few weeks
• At least one of the pays/zones is decent and would be subject to a vertical drill & have to be fracced & would be anticipated to yield 400-500 BOE/day making it economical
• Bluff and the nitrogen cap encountered was not a phenomenon that Terry or any of other member of the team had seen previously. “Not in his wildest dreams” did Terry ever expect to see such analysis and actually personally participated in the field discovery and information gathering -self confessed to appearing in his equivalent to HardYakka Shorts in the fields.   
  
• The comparison is to the West Poland oil fields which are derived from the same/identical geologically aged rocks in addition to identical environmental structures.
• Neutron Porosity and Density Logs from Bluff may confirm theoretical leanings re nitrogen and the presence of hydrocarbons associations.
• The current delay ( which should be resolved in days-week ) is negotiating/mitigating the demobilization cost of the Rig they have contracted.
• SSN also discovered a percentage of Helium present in the   Bluff drill which may have significance given the high price of helium commanded on the market.

• In the South Prairie Project the operator may be drilling Pubco at the end of this month ( although Terry hasn’t heard from the operator )
• The farm in partner in Roosevelt will drill their first Bakken well towards the end of year
• The Farm in operators in Roosevelt are Canadian, and are taking a ‘fresh look with new ideas’ about drilling this project
• Terry is addressing the task of acquiring new land prospects – the forward looking plan is to keep the rig out there for 2-3 years, increase production and fund ongoing projects through debt financing - to quote Terry “Why have acres if you can’t afford to drill them”
• The shorts will disappear with decent production results from the TF and / or the Rainbow wells. As Strazza mentioned the TB quote “the shorts will burn in their own jocks / shorts one day soon and will go away which will add to the re-rating of the SP
• Terry has ‘no fear’ about the TF wells and expects good results from each one
• Gladys also will be ‘just fine’
• Auditors cost will reduce in the near future from $800,000 to $300,000 by SSN changing auditors. Also, by not replacing the latest retired director will save approx. US $700,000/annum

Of Special Interest

• North Dakota produces 2000 new millionaires per year
• The Bakken has changed and continues to change the balance of power in the Middle East
• Uncle Bob has learned background predominately in finance and has ‘made a hell of a lot of money with his investments in Oil and Gas companies’. Terry has been grateful for his continued communications/discussions and in particular his advice re some suggested finance issues relating to SSN. He has been a shareholder in SSN for 18 months or so.

How sweet it is.
   

cheers
netstockings