are you an ssn believer, page-28

dbl,

"20c wow ! We were higher than that a year ago !"

One needs to differentiate between the price of past speculation and the price of future value as they are two very different things.

I think you will recognise that the rapid runup from 6c in Dec 2010 to 23c in Mar 2011 was based on excessive speculation of something ccompletely unproven and the SP went well beyond the realistic value of the company at the time. I don't therefore think you can use those prices as a yardstick for future expectations unless you are expecting further rampant speculation.

Generally unless we are trying to ramp the crap out of something for a quick gain its better to estimate future SP based on the additional value a company can achieve. I say this not because I think that 20c+ is unachievable but rather because you seem disappointed that achieving 20c based on value added since the speculation is no more than the speculators were willing to pay a year ago. If the company has added enough value to make the company worth 20c in the last 12 months thats fantastic, if speculators get over excited about this (as they may well do) and drive it to 40c then that fine also but what the speculators do is not a reflection of what the company is worth and failure for SP support at those extreme speculative levels is not a poor reflection on management.

A house built on quicksand might look good for a while but its value isn't as it appears. A house of identical appearance built on bedrock is surely a better bet. SSN is working on those foundations now as a solid basis for future growth.

If SSN proves either or both of these new fields the risk is significantly reduced thus creating the foundation that will underpin the SP going forward. Conversations about what these few current wells will add to daily production would be an almost insignificant aspect of SSN updated value. The current SP is based on doubts about the fields and these appraisal wells are merely the canary in the mineshaft. Success in these wells will see forward projections based on development of large parts of these fields and a few hundred extra barrels of oil per day will seem like chump change.

I hate predictig SPs because as you have discovered they often have nothign to do with value and more to do with sentiment and speculation. I can say however if they do have success in both field then potential value could exceed 20c by a long way. The SP will however not reflect this as sentiment will either fail to recognise it or speculation will drive it through the roof. Both will probably happen at some point but none of us know in which order, and we can't discount the risks of possible failure that the market is currently fixated with.