RE: 2P RESERVES I'm not a politician but perhaps I should take your advice, I'm sure I can count on your vote. Haha. If your not writing articles and posts all over the place you should probably tell the authors to quit copying you. Just a heads up. Now to your points.
- IP's are meaningless. They are fluff. Eye popping IP's over a 10 day period mean nothing. Look at the type curve from Q3. You are misleading people by only pointing out the first couple days of production and not the exponential declines. After 235 some days the wells are at 95 bbl/d and we dont even know where the decline will level off at.
- You can't blanket compare waterfloods. Different fields different results. In comparing Pinecrest, Legacy and Arcan you are all over the map. Once Arcan releases comprehensive results I will be a bit more confident in the success of Second Wave's flood. Also if the flood is not started till Q1 2013 and it takes a year for the full results to be realized that may not be soon enough. A flood is not a silver bullet. Also as operator Crescent Point will decide when the flood starts, not SCS.
- Reserves are great and I'm sure their will be growth in reserves. Thank goodness or else out bankline could be in trouble. I guess though we are already in violation of the covenants.
- Arcan is a bit different story as the convertible debentures other then financing costs don't affect day to day operation. They do still have space on their line of credit. Also they 100% own all lands and infrastructure. SCS can't say the same as they farmed out their land, lost operatership and sold interests in their facilities. So if someone buys Arcan they have total control, someone buys SCS they have no say in the development of the asset.
- Crescent Point doesn't pay minimium 100,000 per flowing barrel. See Reliable Energy acquisiton. Also why would they pay any more then they have to? They will either steal SCS from shareholders with a low offer or continue onwards as is. Crescent Point won't do any favors I don't think.
- From Q3 report current debt is 111 million, not 85 million. Which is an important distinction. Actually a huge distinction. Please be accurate on the basics if you are going to give other people such grief.
- What is your justification for management missing the guidance by such a huge margin? Clearly the wells aren't delivering as they expected or else they wouldn't be off by so much. If oil climbs to 100 and differentials evaporate then fine they can pull this off. 5-10% growth and a bit of debt repayment is kinda weak isn't it? Plus the weather risks from a single asset clouds all projections.
- I hope your right and the market looks past the debt, operational failures, lack of control over the asset and the massive declines and pays what the reserves are worth or fixes the value of the company at the flow barrel value of its not debt strapped peers. I also hope Crescent Point decides they need to pay 100,000 plus per flowing barrel. With the adjusted debt figures whats that like a buck? Thats decent. Haha. I think its more realistic that Brookfield will take things into their own hands and change the corporate structure.
Thanks for adding to the discussion. This is good. Onwards and upwards for SCS!