Shareholder Briefing, page-41

• Billabong is predicted to be similar to Blackdog as a producer
• Gladys and Blackdog thus far have had the biggest fraccs.
• Matilda Bay 1 has been subject to a mechanical problem which will be fixed in the near term
• IP rates on Bootleg 4 and 5 will be probably known after Gladys
• Fraccing of Bootleg 6 and 7 and 8 will occur in short term

• Terry is addressing the task of acquiring new land prospects – the forward looking plan is to keep the rig out there for 2-3 years, increase production and fund ongoing projects through debt financing - to quote Terry “Why have acres if you can’t afford to drill them’
• First IP rate known next will probably be Gladys, it will be flowed back within the next couple of weeks ( although Continental are not very forth coming with information, and provide ‘one liners’ )

• The first level of log pay ( out of three ) found in the Bluff drill will be tested in the next few weeks
• At least one of the pays/zones is decent and would be subject to a vertical drill & have to be fracced & would be anticipated to yield 400-500 BOE/day making it economical
• Bluff and the nitrogen cap encountered was not a phenomenon that Terry or any of other member of the team had seen previously. “Not in his wildest dreams” did Terry ever expect to see such analysis and actually personally participated in the field discovery and information gathering -self confessed to appearing in his equivalent to HardYakka Shorts in the fields.
• The comparison is to the West Poland oil fields which are derived from the same/identical geologically aged rocks in addition to identical environmental structures.
• Neutron Porosity and Density Logs from Bluff may confirm theoretical leanings re nitrogen and the presence of hydrocarbons associations.
• The current delay ( which should be resolved in days-week ) is negotiating/mitigating the demobilization cost of the Rig they have contracted.
• SSN also discovered a percentage of Helium present in the Bluff drill which may have significance given the high price of helium commanded on the market.

• In the South Prairie Project the operator may be drilling Pubco at the end of this month ( although Terry hasn’t heard from the operator )
• The farm in partner in Roosevelt will drill their first Bakken well towards the end of year
• The Farm in operators in Roosevelt are Canadian, and are taking a ‘fresh look with new ideas’ about drilling this project
• Terry is addressing the task of acquiring new land prospects – the forward looking plan is to keep the rig out there for 2-3 years, increase production and fund ongoing projects through debt financing - to quote Terry “Why have acres if you can’t afford to drill them”
• The shorts will disappear with decent production results from the TF and / or the Rainbow wells. As Strazza mentioned the TB quote “the shorts will burn in their own jocks / shorts one day soon and will go away which will add to the re-rating of the SP
• Terry has ‘no fear’ about the TF wells and expects good results from each one
• Gladys also will be ‘just fine’
• Auditors cost will reduce in the near future from $800,000 to $300,000 by SSN changing auditors. Also, by not replacing the latest retired director will save approx. US $700,000/annum

Of Special Interest

• North Dakota produces 2000 new millionaires per year
• The Bakken has changed and continues to change the balance of power in the Middle East
• Uncle Bob has learned background predominately in finance and has ‘made a hell of a lot of money with his investments in Oil and Gas companies’. Terry has been grateful for his continued communications/discussions and in particular his advice re some suggested finance issues relating to SSN. He has been a shareholder in SSN for 18 months or so.

How sweet it is.


cheers
netstockings


Hi,

Thanks net stockings for your comprehensive details of shareholder meeting. Before anyone starts to sing praises of the company, have a look at this.

" As per the conditions of bank loan - the company must not spend no more than $5 million per annum on the administration expenses". This alone is the reason for TB to start reducing the cost base otherwise he could have done that long ago.

As you stated that company still needs about 500 boed to cover cost base alone ie. approx $14.4 million per year at $80 per boed. This is very worrying and is probably the reason the share price is not getting any traction.

most of the wells settle at around 100 boed after a year of production ( if not earlier). Based on our avg WI of 20%, SSN share per well be around 16 boed net (after royalties). This means we will need 32 wells just to cover the cost base ( remind me how many are we drilling). Good thing is that management salaries will be well covered at least.

the initial well production ( that is in first 6 to 12 months ) will be needed to pay the bank loan and the interest. Remember we will need approx 1000 boed for 12 months to pay off the current debt of 10 million (after deducting 500 boed for costs as per your post). How much we are producing now - approx 650 boed.

the only way the shareholders will get a look in is Bluff or other area like Roosevelt comes good until then we are just treading water.