You aint seen nothing yet, page-45

Hi Rob,

Once again a very well presented post. Was hoping that someone else might have asked you a few questions. I've read it now more than a couple of times and I wanted to give some feedback because I am struggling with what the real "takeaway" should be given:

"Main purpose ... get a feel for the costs and risks for an O&G company to go from explorer to producer and also to try and understand how sentiment changes throughout the cycle.... It's a work in progress and subject to my own interpretation and bias."

and the ending calculation which is taking the sum of exploration and development payments in dollars, subtracting the sale of properties and dividing that by the 2015 estimate of 1,000 boepd production and come up with Cost per Boe of 25,537. Were you intending to divide that to be $25.537/Boe

I'm struggling to make the link that those payments in the past are an indicator to future costs based on a boepd projection? And why only those payments - surely everything spent should get counted.

I was thinking that if thats what you were trying to figure perhaps taking the sum of all payments and subtracting the sale proceeds and dividing that by total boe produced over the term might be a proxy?

i.e ($123,554,000 - $90,017)/764,419Boe = $43.86/Boe - and not sure what to infer from that anyway.

Remember that SSN itself gave a full cycle cost estimate of $69/BBl. Why the large discrepancy? Because of detailed F&D Costs - based on exploration and development costs PLUS cost of unproved property acquisitions which is divided by discoveries, any revisions to reserves (because they are produced and then PUDs get added) and reserves added through improved recovery. We don't have those numbers. Not to be confused with the simple F&D cost used of dividing the well's D&C cost by the EUR.

Keep up the good work.

Regards