an impressive reserves report

An impressive reserves report this month underpins the value of SEA’s Bakken acreage in North Dakota. Net proven reserves from its Bakken
acreage are 3.4 mmboe, comprising 2.7 mmbbls oil and 4.5 bcf gas – this was far greater than the 1-2 mmboe we were hoping for.
We anticipate SEA will use the reserves report as leverage to farmdown its interest in its 100% owned Phoenix prospect for cash and/or to
fund future drilling. Ideally, a 10-25% retained interest would suit SEA’s balance sheet and portfolio balance going forward.
A breakdown of our $0.21/sh valuation shows $27m or $0.15/sh for SEA’s Bakken acreage. This sits at the bottom end of the $31-90m value
range assessed by Ryder-Scott, the independent reserve auditors, showing upside does exist. The Bakken still remains an attractive area to
develop oil due to its vast infrastructure network, long term wells (>20 years) and its huge low risk resource potential.
If oil prices continue to rise and costs come down as expected, SEA should be in a position to announce the resumption of drilling activity
early in the Sept Q.
It is clear following the downturn over the past year that SEA’s best skill set is buying assets early and selling, rather than drilling wells, particularly