Thanks Rob. Just assume your right for modelling purposes....

Thanks Rob.
Just assume your right for modelling purposes. Follow that the figure you've put up is FTM from Sep'15 thru Aug'16 so clearly that would be considerable higher. Can you give me the estimate Jan'16-Dec'16 as a cross check.

OK is "qualitative". Covenant tests and deal metrics are "quantitative".

SSN went into Q4 with (as I read it) significant Hedge protection. HOWEVER, I still get Negative EBITDAX for the Qtr (using your 3mths of production estimate).

Same model below but using $38.50 as Qtr avg WTI just using simple average of Oct/Nov/Dec mthly averages from PAA) and $8.50 for the Bakken differential (harder to judge), yields the following


Kept the SSN+OAS combo in as it takes effect from Oct 1 and left the "NM" for that column as the BB will change.

What's important is the SSN column and at that Q4 average oil price, even with estimated hedge gains is still negative EBITDAX for the Qtr (and so given TTM was a fail in prior Qtr and we know that the Dec'14 Qtr was better than Dec'15) and ergo the TTM will be further negative (IMO).

This is what I'm showing in the model - SSN needs this deal to go ahead and can show to MOB that it can make the numbers work (at $50 WTI).

The model gets better I think when (if?) SSN discloses the new production plan and combined company costs. It could also get worse if those disclosed plans are less production and higher (absolute) costs or oil going lower.

I think MOB might be persuaded to double down on their BB with $45 WTI as the 2016 avg.