Very interesting...I was in a quandary about how to view this...

Very interesting...

I was in a quandary about how to view this announcement. My optimistic side was telling me that based on how Terry has treated shareholders in the past that this current LTIP is a heads up to existing shareholders that he believes that a increase in the share price will eventuate.

My pesimistic side however was wondering why he has decided to make this announcement after a string of publicly perceived negative announcements and delays.

Im generally not a person who will immediately form an opinion or decision and comment but will actually self analyse both the negatives and the postives. I will then jot down the pro's and cons for both on a piece of paper and then based on the notes work out the probability of which one would be the most likely scenario.

So here are my thoughts in a nutshell :

Pro's :

1. Terry must have realised after the latest string of announcements that in general have been perceived as negative that he would receive a rather large backlash at this type of LTIP.
So unless he is some type of masochist and enjoys facing the wrath of shareholders in an upcoming AGM I believe there may something in the wind or Terry sees a positive rerating of SSN eventuating.

2. Over the years I have held SSN Terry has come accross as someone who has been very straight forward and of good moral fibre especially towards shareholders and I find it hard to believe that this current LTIP would be implemented unless he truly believed it was (future wise) going to be justifiable.

3. Unlike numerous other CEO's / directors he is taking this current LTIP purely in shares and options and not a salary pay rise so the performance of company will have a dramatic impact on his own personal monetary gain.

4. For some like myself I have seen a number of very positive annoucements that were unfortunately overshadowed by some negative announcements and delays. I think people have been focusing more on those pump delays and not looking at some of the information issued by Terry holistically. Some of the positive information interwoven in these pump delays have been quite substantial but in general people have a tendancy to fixate on the negative side.

5. Shareholders are also worried about the current state of the share price and depending on when you acquired your shares with SSN i agree in a sense it has been languishing for some... your perception of share price is relative to your timing of purchase.
I purchased shares back in late 2009 and early 2010 for under 2 cents so from my perspective I see that since the "turning point" of SSN which I believe began with huge sale of land which gave SSN $70 million SSN has done extraordinarily well over the last 2-3 years.

6. Some people see a companys success is based on its share price. I do agree, but only to a certain point as there are many external factors that can dramatically influence a share price well outside the control of any of the board of directors.

7. SSN is still in its infancy. It's still doing numerous test wells and evaluating the best areas to target. It's current focus is not in drilling wells randomly and hoping for the best like some companies but is doing comprehensive due diligence to understand the lay out of their tenements to increase success rate and reduce overall costs.
Really when i first got into SSN back in 2009/10 I had a 4-5 year timeframe of when I believe this company would start becoming a "real" producer and a substantial rerating of its share price.
I believe that some people who purchase shares in companies sometimes need to take a reality check as to the timeframe they need to hold mining company shares who are in their early stages before seeing a significant rerating of share price.



Con's :

1. Timing of the announcement from many shareholders perspective could not have come at the worst time. A string of negative announcements and delays and then the board comes up with a nice tidy LTIP? Who are they kidding?

2. Too many times I have seen directors and CEO's in companys substantially increase their own incentives on the back of consistently poor performances.

3. As much as some CEO's state that one should not look at the performace of the share price but the actual business itself ultimately we as collective owners of this company ONLY get a benefit if the share price rises.
If Terry is confident about the companys future success then instead of just giving these shares and options to the board how about adding a share price, market cap or earnings per share "trigger" point ( IE : he receives these benefits only when the share price, market cap or earnings per share hit a certain level that way I believe there would be little hesitation in shareholders passing such a LTIP resolution ). I believe more in the earnings per share or even a certain bopd per day target than a share price or market cap as they can be outside of the control of the board.

4. Although there have been other positive announcements the true judgement comes in the share price performance which is currently been pummelled down to the 9 cent mark.
That means since its high back in March 2011 of 23 cents it has dropped around 60%. Not the most encouraging sign for an up and coming company now is it?

Conclusion :

After analysis and weighing up the pro's and con's my overall sentiment has not changed. Terry has shown consistently over the period I have held SSN that he has the true welfare of both the business and the shareholders at heart and with the latest announcement of the LTIP, based on previous experience I will certainly give him the benefit of the doubt.
Again, all one can do is really analyse someone's behaviour based on previous experience and to date there is nothing Terry has done to give me any reason to doubt his integrity... yes there has been delays and other issues but Im sure there is nothing more frustrating from Terrys perspective to have to announce several times in a row that the pump has failed or deadlines have been delayed due to drilling issues. All items outside Terrys control unless he is now hands on with the frac crew?

Go SSN and good luck to all Samsonites