Cash Margin & Oil Price Rise, page-5

Well the 10Q alluded to potential further asset sale or equity raising - so there's a couple of options.

I did kinda sorta of point the challenge of EBIT/EBITDAX multiple concern out in this thread
http://hotcopper.com.au/threads/oil-at-41-44.2424043/#.VNl2rSzXvuc
and was royally pasted as the devil incarnate by a select few.

There are some things that SSN has no control over, primarily:
1. Price of oil - they are a price taker
2. Weather - any bad weather that causes shut-ins or production delays will be a problem

Things that SSN can do to assist with mitigating the breach
1. Reduce costs - e.g. partially suspend salaries - pay in compensation in stock - a big part of the problem is the $G&A/Boe
2. Hedge further - might seem counter intuitive but oil has rallied and could (be the operative word) fall again. Is further protection needed?
3. Renegotiate debt with lender - pay a higher interest rate now for multiple relief to say 4.0 or even 4.5 (assumes cooperative lender).

The Capex spend wont effect the EBITDAX multiple. However getting those wells D&C and tied into production will - both in terms of revenue because you are producing more and expenses (which while cash cost goes up the $/Boe will come down).

Key to this Qtr is production - get it up to 1,000 boepd and if possible monetize hedges as much as possible and the Debt/EBITDAX multiple should be OK Q1, provided oil doesn't fall to $45 again.