So how will TB get the company through the next 6 month's buc ?
SSN's production is about to dramatically drop in the next 2 month's, to 620
BOEPD or there about's ? Note it's BOEPD and not BOPD.
The Bakken infill drilling programme has been slowed because of the POO, so the planned/expected growth in production and income from the expected expansion in Williams County will not eventuate in the immediate/near future ( my interpretation on the coy statements, happy to be corrected )
Focusing on 2 projects which respond to an oil price of $50 and the "Bluff", apparently is very attractive at $50/barrel. Even though the POO has been under $50/barrel for some time ( which could place the "very attractive" Bluff project into question for now ? Where will the cash come from to drill and complete these vertical's ?? Remember the decline curve.
The verticals are going to cost $3mill to drill and $1.7mill to frack. Again, where does the money come from ?
buc, do you have any idea ? Don't forget that TB has to keep ahead of that dastardly decline curve or ,,,,,,,
The more I think about this new play TB is buying into ( no matter what the financial cost is ) the more I would be concerned about SSN's ability to keep up with all of their JV partners. Does the company need extra pressures to deal with ? In such an environment as we have today, is it a good idea to try and expand a company which is short on cash and big on expenditure ?
How much pressure is TB under with these covenants ? How much pressure is he under with JV partners to either keep drilling/completing or just sit tight for now ?
◊ Produce existing inventory of North Stockyard and Rainbow wells.
◊ Drill the downdip Bluff prospect well, extremely attractive economics at $50 per bbl.
◊ Complete the commercial arrangements for a new project area, that is feasible at $50 per bbl.
The slide below is a concern especially with the way the POO is behaving. If it does stay under $50/barrel then I can't imagine how TB's future presentation's will read like, especially after this line,
The Bluff Project is very attractive at a $50 per bbl oil price.
Is it the right environment for expanding into new ventures with so much uncertainty with the POO, the companies production to drop off over the next 2-3 month's, little cash ??
What do you think buc ? Do you have any ideas of your own ? A sensible, thought out post with reasoning that will show how this company can grow and move forward ?
Why is Samson a BUY ?
All just my opinion
Cheers
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