Good thread TP, I think its good to remind ourselves why we remain invested in the company (even if for some its only because we feel stuck at prices well below what we paid) in the face of negative sentiment from some of the 20/20 hindsight experts.
I agree with your comments about the company’s assets. I was reminded yesterday by chand that it is worth looking back over old data to bring current results into context (that was about the Defender flow rates). I was also interested to read someone comment about how Nth Stockyard is the company’s saving grace, or words to that effect, producing 300boepd. So I looked back at the history of Nth Stockyard which is now considered a mature field with 7 producers, all of whom I understand have now either paid back on their original capex or very close to it.
Nth Stockyard started with Harstad spud in December 2006 and was put into production in March 2007 at 100 bopd. The company and its WI partners decided to do a frac which was conducted in 2008 Q1 and increased the production rate on Harstad for a short while to 380 bopd. That was the well that started the Nth Stockyard play development for Samson and its partners, even if Harstad was not actually a Bakken producer, but a Bluell producer.
The company followed that with Leonard in Q4 2008, the company’s 1st Bakken well in Nth Stockyard, which started drilling in October of that year and was completed in March 2009 producing 170 bopd, and then later (October 2009) re-stimulated to increase production to 320 bopd.
Gene was spud in early 2010 and it was this well that got a lot of us on board especially in the lead-up to the final IP rate ann of 2936 boepd in April.
From April 2010 it took 15 months (until July 2011) to get 4 more Nth Stockyard Bakken wells into production, being Gary, Rodney, Earl and Everett.
Now some will argue that took way longer than necessary, and demonstrates even back then that Samson was inept in managing its drilling campaign (i.e. should have managed Zavannah better). Maybe they are right. Maybe its worth comparing that timeline to other oilers developing a new field – I have and I’m comfortable that the length of that timeline is not out of the ordinary.
But what does that timeline represent? What I see is that it took 2 years – Q4 2006 to Q4 2008 – for the company to prove the Bakken horizon as a producer in Nth Stockyard with the Leonard result. But Leonard itself wasn’t really a blockbuster at 170 bopd, or even later at 320 bopd (for a Williams county Bakken producer anyway). It wasn’t until Gene came along that production techniques were optimised to achieve the best possible result, and that was in Q2 2010, almost 3.5 years from the 1st drill bit turning into the Harstad well. This was followed by the full field development, at 640 acre spacings, completed some 4.5 years after Harstad was spud, and now they are starting on the 320 acre infills.
So why look at that history? Because field development of both Hawk Springs and Fort Peck, with the initial wells in each play, have both been underway now for just on 12 months – Defender was spud August 15th last year. The company has now established the probable Bakken pay area at Fort Peck and the judge is still out on both wells at Hawk Springs. The company has so far spent less time testing and developing these two much bigger plays than it did the smaller Nth Stockyard play by the time it had re-fracked Harstad let alone drilled Leonard and proven the Bakken horizon there.
Anyone who is suggesting that we should write off either Fort Peck or Hawk Springs should speak to those who wrote off Nth Stockyard after Harstad or Leonard and sold SSN when this stock was still 1.0-1.5c, when the company had only $4M in the bank (and debt of $11M), and was producing a net 100 bopd. The current plays (excluding the new one) are far bigger than Nth Stockyard will ever be. Nth Stockyard took 3.5 years from start (with Harstad) to optimisation (with Gene). I expect Fort Peck and Hawk Springs will have more producing wells each in the balance of their 1st 3.5 years (i.e. 2.5 years from now) than Nth Stockyard has today.
That’s why I still hold.
Cheers, Sharks..
SSN Price at posting:
4.6¢ Sentiment: Hold Disclosure: Held
