Cmon, you should write an Junior O&G book, I'd buy it!
Imo the really interesting bit with SSN currently is those 6 wells, the Pad concept and the mix of these with the existing wells and facilities. As sud's mentioned I think the production costs will come down per boe now everything is in place and because those wells have been paid for and ready it is only the incremental cost to bring into production not the full cost ($29 less royalty & taxes) that the new production attracts, that should help June to Dec numbers and any improvement in OP if it happens will be a bonus. For me the 13 undrilled don't matter if the current production holds the lease and future drilling could more than likely with planning be financed from free cash if/when op improves. The fixed costs of the pad facilities may now be largely covered by the existing production.
Using Toohey's well as a guide it has produced 68Mmbbls net to SSN over around 200 days before it was shut in which gives a rate of around 340 boed over the period, even using 365 days gives 186 & times 6 wells is between 2,049 and 1,118 boed ready to go over a full year and more than enough to balance the decline and currently represents unvalued production in the MC imo. Also the progress of Jet pump on Glady's will be interesting to see if this can assist in managing decline and reduce that need you mention for constant drilling to maintain a total production rate.
The production planning side is of interest to me more than anything but I think the combination of Low OP, lack of O&G interest and the dominance of a day trading mentality at present hides many of the positive fundamentals here. Not that there is anything wrong with that though and is understandable in many ways, we are probably in the wrong sector market wise but it doesn't hurt to plan for better days.
Disclaimer: All the above is only my opinion and may be a wrong interpretation of where things are at.
Cheers
SSN Price at posting:
1.1¢ Sentiment: Hold Disclosure: Not Held
