I wonder if perhaps an explanation might be forthcoming from your friend (Andy?) as he/she suggested you might mention this point on HC.
Just for focus could we address just the North Stockyard (NSY) project. Why would the NSY wells revert back to a WI exceeding 50% after the wells payout? I may be one of those "idjits" he/she refers too.
I went back to June 2013 Qtrly to see the pre-sale position of 50% WI in net 1,061 acres. The Sep Qtrly shows the effect of the divestiture of half of SSN's equity position in NSY undeveloped acreage as well as 25% interest in the drilled but not yet completed Billabong and Sail&Anchor wells. SSN's ownership reported as 25% WI in net 530 acres - makes sense so far to me.
This transaction is described by SSN as a divestiture and not a drill carry. There is no mention of APO or BPO wrt to WIs.
Obviously reverting back to >50% WI (???) APO would be quite valuable to SSN as effectively that would double their production share from each well but I don't see that anywhere???
That SEC filing notes (with Seller being SSN and Buyer being Slawson)
"1.3 Seller’s Delivery of Minimum Net Mineral Acres and Minimum Net Revenue Interest. Seller acknowledges and agrees that it shall deliver to Buyer at Closing: (a) not less than a collective 528.00 net mineral acres in the Leases and Lands (collectively, “NMA”) and (b) not less than a seventy-six and one-half percent (76.5%) net revenue interest in and to each of the Leases and Wells (collectively, “NRI”). In the event Seller is unable to deliver to Buyer the NRI pursuant to the terms of this Agreement, on or before the Final Settlement Date Seller shall execute an assignment of overriding royalty interest in favor of Buyer, in a form substantially similar to that set forth on Exhibit D, in an amount equal to the difference between the NRI owned by Seller in the Leases and Wells at the Final Settlement Date and the NRI."
Nowhere in that document is there anything regarding a change in WI APO for wells drilled. Can you help out?
SSN Price at posting:
1.0¢ Sentiment: None Disclosure: Not Held
