Ann: Estimated Reserves, page-31

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buc

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21/02/17

11:48

Post #: 22775210
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Originally posted by cmonaussie ↑

Better and more relevant to keep track of
(a) WTI less the differential .... $70WTI implies what ASP for SSN? ~$62-$64
(b) Field level Netback (so BEFORE any G&A or Finance charges). Really just all LOE + Production taxes.

That will tell you how much the asset is capable of earning (and all someone who may want to buy it will pay for it ...). Once you subtract the G&A and Finance you seen what SSN earns on it. And when you deduct the DD&A and add/subtract hedging you can see the actual Net Income.

OAS accepted ~$16M for FB from SSN in 2015. It had PDP Reserves volumes then and SEC PV10 PDP $value. During 2016 SSN produced and sold oil from FB as well as invested capital (do we know how much) to bring the PDNP wells back to production (do we know how much produced and how much incremental added?)

Answering the above will get you closer to value of FB now. What relevance was the "value" of FB back in 2010 from the formations SSN owns and produces from now. Back in 2010 what if the value was all in PUD Reserves? You'd be dividing by zero (as PDP = 0) and now FB has infinitely more value (PDP >0). What if the value was $100M of PDP Reserves and now its say $40M. Does that mean its 60% less simply because the oil was produced (but how much Reserves added?)

Value lies in the future cash generating potential of the asset. Figure that out first then work on future assumptions.

GFTA

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'What relevance was the "value" of FB back in 2010 from the formations SSN owns and produces from now. Back in 2010 what if the value was all in PUD Reserves?'

Do you think Chesapeake would have used your metrics to value Hawks Springs when they paid $74m for 10 000 sq/m of unexplored/unproven acreage?

SSN Price at posting: 0.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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Ann: Estimated Reserves, page-31

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Ann: Estimated Reserves, page-31

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