SSN 0.00% 1.5¢ samson oil & gas limited

D for Decline. TB is almost at the point where he has little...

  1. 3,989 Posts.
    D for Decline.

    TB is almost at the point where he has little wriggle room with $$ and keeping the drill bit in the ground. The Decline curve is about to start chasing the coy's cash account. In other words, TB needs more cash to continue drilling new wells to keep the current rate of BOEPD. No buc, $6mill won't do it ! The fact that the Coy kept above the 1,000BOEPD rate is great and also, the BOPD increased by 2,928, so the figure for May should also be above 1,000BOPD with one more well (Matilda Bay 2 ) to run.

    Will another Capital Raising be the way ? buc, will assets be sold off to concentrate on the Bakken ? probably a good thing to do ? how would you steer the ship if you were Captain Barr, buc ? What is next for the company ? How will the rabbit keep ahead of the Greyhound ? As the green text shows, the company's production has been pretty positive over the past 2 month's, even against all the headwind TB has kept a pretty respectable production number and I think it will stay around the same figure for May. But, as the red text tells the story, the company is about to run its last well for this campaign. What is the forward plan buc ? What would you like to see TB do in order for survival ?

    " April’s oil production was higher than prior months because additional wells were bought on line during that month. Currently all of the wells except for one well (Matilda Bay 2 which is undertaking a work over) are on line."

    "As at March 31, 2015 we were in breach of our debt to EBIDTAX covenant.
    Thats strike 2 ! How many more strikes will  MOB allow ??  TB must be on very good terms with the MOB Manager ?

    TB's last 4 words here may well be very telling ?? "for this quarter only." ( also in the first breach )
    We received a waiver from Mutual of Omaha with respect to this breach for this quarter only.

    Debt to EBITDAX (annualized) ratio no greater than 3.5 has been triggered twice now. So they need to cut expenditure even further. What about the board taking a pay cut ? What is TB raking in every year ? Have the board ever taken a cut ?? Really not sure on this ?

    Finally, if TB can get the much needed cash for the company's next 12-24 month's of drilling and, also evade triggering a covenant for the 3rd time, I believe the future of SSN will be much clearer and brighter! It will be tough though but he will have earn't his stripes and a pay rise if he can pull it off.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.