SSN transformed!, page-3

Thanks MS.

Please though keep in mind the very important caveats I have on that (apart from oil price) transformation, which are not limited to :

1. MOB agrees to fund the deal and with sufficient Capex to allow SSN to pick the low hanging fruit in the OAS acreage

2. The decline rates of existing production (NS) is approx correct and that new production declines at lower rate

3. The capital efficiency rate - is it possible? (#1 data point concern)

This why I put in the comparison to LNR (for me it was the other way around - I have more comfortable with the data points for LNR yet they also will change as Qtrly's reported and Capex plans confirmed - I put in SSN to see how they truly stack up).

I'm not betting man (anymore) - so I'm waiting for MOB to make their decision and for SSN to release some sort of proforma so I can better assess the risk. This is where the comparison post is useful.

Look at how steady LNR performs (and the strength of its hedging in 2016 and how that gets much weaker in 2017 until additional hedges layered in on any oil price strength). In both instances I'm keeping production at a steady state (after all LNR does have $220M of unsecured notes that would need to be refinanced by Apr 2019)

Look then at SSN - it still struggles through 2016 and even 2017. However it really starts to rock (and you can see this in the double double of EBITDAX margin) once the benefits of the low cost recompletions and conventional verticals kicks in.

Anyway, GFTA betting or investing. Leave the bean counting to Rob79, he is much better at that than me.