Samson Oil & Gas Ltd. ADR (fka SSNYY)

[MyBad]

from Samson1234:

SSN does not fear the decline in crude.

Samson is hedged at $85 a barrel in 2015

Average production cost per barrel is $31

Average production cost per barrel in North Stockyard is $21

After Samson lets the wells rip (within 60 days) at 6,500 BOPD at $85 WTI the shares should be trading at four times the current SP.

Here is how I get there and please criticize my assumptions and evaluations. Just post an explanation as to why my numbers are wrong.

Projected EBITDAX (MM) 1.37 X 2.5 = 3.4175
Proved Reserves 1.8x10+100= 118
Daily Production BOPD6500X85X365X21= 42.3

=164 less debt including ARO (20) = 144/143 = $1.00 per share

In my view the EBITDAX projection in this model is low as we would not expect an operating loss as a result of consistent production of 6,500 BOPD. If you don't believe Samson will reach the 6,500 BOPD assumption for 2015 then adjust accordingly. The model assumes $85 oil which I am suggesting will be the average SP for the period. If you don't believe that then adjust accordingly. The debt is overstated here purposefully to model possible draw downs of the credit facility. The overall point of this exercise is that even at $80 or $70 a barrel in 2015 Samson is undervalued. When, not if, the wells start flowing again you should be looking at a four bagger from current levels.