From my perspective Roosevelt is all about locking in the fundument value of SSN shares to maybe the 20c range. Once the Rossevaelt valuation is in place SSN will be able to afford the SOA wildcat risk (without trashing shareholder value should results fall below expectations).
Comparisons are difficult and dodgy but KOG is often touted so here we go. KOG seems to operate primarily in the Williston Basin and holds a total of 158,000 net acres vs SSN on a likely 54,000 net acres. KOG reckon they can do 819 net wells ro SSN's 502 net wells on the upside. KOG has a market cap of $2.6b. SSN recons on an upside of 122mmbo proved while KOG says 55.5mmbo ...... clearly the proven KOG numbers are a lot more proven than the SSN guestimates and the market has valued the different level of proof.
KOG is also producing around 15,000 boe/d .... a number which is just a dream for SSN at the moment.
Still IF Fort Peck (hypothetically) flowed as well as Williston, the market cap valuation for this play when producing properly would be 35,000/158,500 x 2.6bn = $574m.
All these numbers are undoubtedly way way off, however they are to me useful in reminding me that SSN is indeed a spec and will remain so until the initial FP numbers for maybe 3 or 4 wells are known. Not long to wait.
Into the future there is an outside chance of SSN growing to a KOG like market cap but that will depend largely how good the Hawke Springs Permian/ Pennsylvanian turns out to be.
Niobrara???? the upside potential remains intact and I think that a second JV well will be drilled. Further development may then have to wait a until the play is better understood and necessary infrastructure is in place. There is no obligation to drill everything at once lol. In the meantime, Roosevelt will likely prove to be the main the cash cow for SSN.
cheers
SSN Price at posting:
11.5¢ Sentiment: None Disclosure: Held
