First I will say this. I'm a speculator.
Here is my reasoning for taking a large position. I did extensive DD during 2010 on the emerging Mississippi Lime / Woodford Shale play in Central Oklahoma along with company's that offered huge upside.
This is what I found in Superior:
1) A wreck of a company, in every way. Period! I couldn't understand why it wasn't bankrupt.
2) An existing land package smack dab in the middle of the sweet spot.
3) The land package was surrounded by Devon Energy.
4) I knew through forced pooling Devon would be drilling and operating the wells.
5) I felt that Superior would benefit greatly from such an occurance.
6) There are several stacked sources of supply under these leases, as few as 12 wells per section will be drilled, and as many as 24 could be drilled in the lower formations. EUR's per well will range from 350,000 to 450,000 bbl's.
7) Superior currently has a drilling inventory of approx 168 horizontal wells and growing rapidlly.
8) Superior has adopted a pure play growth strategy. Similar to Northern Oil and Gas Company that does non operated wells in the Bakken Shale.
9) Northern went from 140 boe per day of production in 2008 to 12,261 per day in 2013. The same thing can take place here with Superior.
10) Superior's production is being funded by outside investors for a free carry.
Hope this helps!
AI
