It's a great result, although the numbers are a bit exaggerated...

It's a great result, although the numbers are a bit exaggerated by the fact they're coming off such a poor previous quarter.

Target production was 1.4-1.6 MMbbls, so they didn't even meet the lower end of target. Even with this uptick they only reached 1.38 MMbbls. That third quarter really hurt them.

Still they seem to be back on track now. But you are right speculator, they need some exploration success now or production will start to decline sharply. SXY's business model for the oil is a bit precarious, they have some nice fields but they're small so they decline quickly and need to be continually replaced by new discoveries in order to even maintain production, never mind expand it.

But so far they are managing that just fine, Reserves replacement remains several times higher than production. But to really break out of this SP rut we've been in they need to convert those Reserves to production, and they don't seem to have the rigs available to be able to do both exploration and development. They did a lot of development this year just gone so they seem to be focused on exploration this coming year. I will be interested to see what target oil production is for the coming year in the full year results. Hopefully 1.6 MMbbls will be the lower end but I don't see the high end going above 2 MMbbls.

So it's hard to see us breaking out of this 60-80c range any time soon IMO.