Gator77 point 3 maybe worthy of consideration the following was posted on Yahoo last nite -
According to the August 2010 Land Rig Newsletter, costs are up. Sorry I can't link the source, as it's a PDF file.
Overall costs will be up 3% for 2010 for drilling, but:
Day rates for 600 to 750 HP rigs are up 13% since 4Q 2009 Day rates for 1,000 to 1,5000 HP rigs are up 38% Barite, essential to fracking, is up 10% Base oil mud is up 5% Top drive rental rates are up 10% to 15%; should jump another 10% Frac services for 15,000 HP rigs up 25%
Econ 101 tells us that when demand increases, so do prices. Makes it harder over time for small companies to operate with big profit margins.
BOTTOM LINE: With 10 wells permitted, I'm thinking SSN has to drill like crazy to become a larger company, or their margins just won't be able to keep up. I bet ol' TB is thinking the same thing.
Otherwise, we become a buyout candidate at some point and never realize that $16+.
