the good news and mostly bad news

Well what a week for SSN.

There is good news and unfortunately mostly 'bad news'. Of course I doubt that many will have been able to connect the dots though as they are too busy with dreams of untold riches........

I've gone through many of the posts on HC and also the Yahoo board along with other sources as well.

The good news: I sold my positions on Friday and made lots of bucks. That is the name of the game.

The bad news required some analysis.

The re-rating of SSN happned as I thought it would when some information about the CHK wells leaked...well I guess it leaked about 150 barrels worth according to some poster on Yahoo.

If one accepts that information and the other information posted on Yahoo, then that is the extent of the good news. The rest is nothing but bad news.

First of all the posts in dicated that CHK is going to drill more wells. The location of those wells was given, but not accurately.

Previous posts have indicated that other CHK wells were on CHK only land and not connected with the SSN ORRI land.

Next, the posts indicated that the wells CHK was drilling would be operated until 'paid off then shut down'. Further production won't happen until until pipelines get put in. So very llitle ORRI can be expected in the near future. The value of the ORRI for the next couple of years is basically zero.

So putting all this together what does it tell me?

Well I guess that is where the bad news for SSN starts. I've entirely changed my mind on how good the 'deal' with CHK will be in the next couple of years. IMO it will turn out to be a 'deal with the devil'.

First of all, CHK has stated that they are going to JV their Niobrara land. IMO that 'deal' will exclude the SSN ORRI land.

Second, the wells being drilled by CHK will be for the most part on CHK entirely leased land with only minimal drilling on the SSN ORRI land. The only drills and work undertaken on that SSN ORRI land will be to meet the minimum terms of the lease requriements. Primary action by CHK will be towards it 100% owned land and the to be JV'ed CHK land.

Third, CHK will NOT be the JV partner on the remaining SSN land.

How can the be proved? Well it is quite simple and will be easy to follow.

1. CHK will announce the JV of its land and eay to check out. I really doubt that SSN will be involved.

2. Pipelines. The current SSN ORRI wells being drilled will probably get the pipelines, but the line routes will show where CHK intends to drill. If those Yahoo posts are correct, CHK already has a good idea where they are going to drill in the future and the line will be set up to minimise future hookup costs. My SWAG is that those lines won't cross much of the SSN ORRI land.

3. Nothing else has changed with regard to any other company operations and I don't expect it to for some time to come. SSN's announcement said it perfectly: no idea.

So the fracs will be done maybe this quarter and information about flows a whi;e after that. Seismic may be done this week and then it has to be interpreted, and shopped. So IMO no JV news this quarter. Diamondback - still snake bit. Sale of the gas assets - zip on that.

T/O - with the price up that is now off the table unless there is a substantial shareholder notice filed soon and it appears that the numbers somehow just don't seem to mttch up between the SEC documents and the posts on HC and Yahoo.

So congrats to SSN holders. IMO SSN is fairly valued at the current price range of 9 to 10 cents a share.

News may change that valuation, but as stated above, not in the short term.