Interesting view of US Upstream Oil Sector, page-5

Morning Chrys

I'm reading the Balance Sheet (of SSN). What are you quoting?

Total Shareholders Equity = $16,666,510
Total Borrowings = $18,699,000

Shareholder Equity is not greater than total borrowings so no you did not get that right.

In the same filing, you can see the Shareholder Equity as at June 30, 2011. It was $77,926,665 and there was no debt. Are you trying to say that SSN destroyed $61M in shareholder equity in 4 years?

Market Cap has no bearing in Shareholder Equity (SE) - sorry if I am confusing you
"Stockholders' equity (also known as shareholders' equity) is one of the three elements of a corporation's balance sheet and the accounting equation as outlined here: assets = liabilities + stockholders' equity."

http://www.accountingcoach.com/blog/what-is-stockholders-equity

You'll understand how it has dropped by understanding what makes up SE.

Whether any elements of what Guggenheim wrote apply to SSN is up to the investor - they are simply opining that in their opinion things have fundamentally changed as to how capital is deployed to the whole NA E&P industry - they might be right and they might be wrong.


Hi VH,

GP no different to Hedgeye, Oaktree, Apollo, Goldman, MS, JPM, Merrill, Mt Kellet, ...
Presume you meant Red Fork Energy (RFE). I know there are others but that one was pretty visible given the context - shale/E&P/covenants etc.

The scenario described by GP is being played out now in a few (US) companies - whether that results in fundamental change we'll see - but easy (bank) credit seems no more and 2nd/3rd lien lending seems predatory at present.


Hi Buc,

That was my question.


Regards.