Cash Margin & Oil Price Rise, page-14

OK - you'd like a more considered response then - btw forgot to compliment the Prof. Julius Sumner Miller close.

Lets start with 2 things.

1. Reported numbers
2. Projected numbers (or forecasted or estimated or modeled or ...)

Don't mix up the two. I given reported numbers - those that come directly from SSN. Those really aren't debatable are they? They are the reality of what has occurred in the MRQ, TTM, Y0Y, QoQ etc. Those numbers are reported everywhere for every stock and are the basis for peer comparisons, company growth, profitability and so on. Why argue. Now I might think a low cash margin is a poor result and others might think its a great result (and it might be if others had low cash margins that were even lower). Like I said - the interpreted negative is done by the interpreter not just the poster.

Projected numbers .... well now that's a different ball game. SSN also gives those out. For example the production number graph from the AGM so both the historical production and a nice growth projection into 2015. I used those production numbers and put up the comparisons. Somewhat dependent on hedging settlements. But those calculations DID NOT BREACH ANY COVENANT in Q4 or in 2015. . So what does that say - overly optimistic projection (and you guys think I am downramping).

You tell me Chrys - why would the smart guys at the bank originate a loan with a 3.5 Debt/EBITDAX covenant ratio? The denominator which excludes all the one offs and keeps the recurring ones is a measure of the capacity of the company to generate income which to the bank is really a measure of the ability to repay the loan. The higher the number the more leveraged the company is and the more risk the bank takes.

I think they are smart - hence the covenant at 3.5 - but none of us their behind closed doors thoughts on 4.21. They granted a waiver for the current reported period. Did it cost SSN anything? Did the covenant vary (I would assume if it did it would need to be reported - but when who knows).

Now truthfully - all of you - did anyone expect that SSN would breach it loan covenant? Just a question.