enough is enough - let us take action, page-77

Good post TCG – good to see you drop in occasionally with some well chosen comments.
 
Now apologies in advance to those who dont like long Giddy-up style posts, but the following goes on for a bit.

Continuing on with this discussion, I’d like to pose the following questions – questions that perhaps most of us should ask ourselves in evaluating SSN’s situation and what should be done about it:
 
1. What do holders want/expect to see from current management?
2. What are the options if you don’t get want you want/expect to see?
 
My answer to question 1:
 
My view is that, based on what’s happened over the last almost 12 months at Hawk Springs and Fort Peck, we have two plays that do have oil, and with high probability its commercially viable oil. Managements has also done a lot of work to test the viability of these two plays – 3D seismic and 3 wells at Hawk Springs, 2 wells at Fort Peck and obtained a small WI in a nearby well (Abercrombie) that offered to contribute valuable information to that play also. This is the development work that we expected to be done, and in all such development there are risks, hits and misses, and it involves testing different options to determine how best to get the oil out economically. I think the company has done that as it was supposed to do.
 
The problem that I view is unacceptable, is the operational performance throughout that period. Dropped tools and plugs, broken strings, etc, are technical problems that are not related to the testing/development work needed to characterise development wells – they are operational problems that can no doubt occur from time to time but if on a regular basis as has been the case with SSN, then that’s unacceptable and the hard questions have to be asked about why these recurring (and they are recurring) problems continue to occur on a regular basis. It is quite clear from the announcement data that what we have is poor operational performance as distinct from testing/development work – i.e. the former cannot and should not be mistaken for or blamed on the latter.
 
What I would like to see, or expect to see from management – is communication from them that they are addressing this situation. This means that they have analysed why these problems have occurred so regularly, and have an action plan or a strategy to reduce or eliminate this problem. Given the length of time over which these operational problems have occurred, and their frequency, it is no longer acceptable to not have addressed the situation as described above (and the fact we have seen such problems again at SOA2 indicates they either have not done that or whatever they’ve done is not yet effective) but just as important is that it is no longer acceptable to not communicate to stakeholders about how they are addressing this situation.
 
My answer to question 2:
 
If we don’t get any communication as per above and/or if there is no analysis & action plan to communicate about, the options I see going forward are:
 
1. Stay invested if you’re content with how management is currently handling it
2. Sell if you’re not
3. Apply pressure to management to undertake the analysis / action plan / communication with stakeholders – either by writing to them, or by organising the voting power necessary to force them to at the AGM
4. Apply pressure to management via voting power at the AGM to agree to other options such as a JV with a proven operator, or whatever else is seen as the right solution that current management should implement
5. Move to change management and bring in a new management, if a better management team can be found to replace the current one
 
The easiest option is if current management takes the front foot and addresses the problem, communicates to stakeholders about that, and does so quickly. Other than that there are no easy options – all of the above involve some pain for gain, and roughly speaking I would say the further down the list of options 1-5, the more painful it gets. My answer to question 1 is just my view of what the problem is – others may have a different view. The options listed in response to question 2 may not be exhaustive – there could be other options I haven’t thought of. But one thing is certain, without answering the questions in a considered way, and deciding to pursue chosen option, the most likely result is probably more of the same – because what is there to suggest otherwise?
 
Cheers, Sharks.