JV, FARM OUT Pekisko and Beaverhill I posted below the great results that CREW has from the Pekisko formation thus far.
SCS also owns 100,000 net acres (100% WI) in Pekisko AND 30,000 net acres in Beaverhill lake formation.
According to the presentation of H1 2012, the company has a drilling inventory in Pekisko of almost 30 years !!! This does NOT account for the waterflood which can extend it to 40 years.
However, 95% of the energy companies have drilling inventories around 10 years.
This is why, I believe SCS MUST JV/FARM OUT 50% of its huge Pekisko position ASAP. It is not worth having such a long drilling inventory.
Additionally, I believe SCS MUST JV/FARM OUT 50% of the remaining 10,000 net acres (100% WI) of its Beaverhill Lake position.
If SCS farm out Pekisko and the remaining Beaverhill Lake, It will get more than 100 MILLION $$$$$$ and it will have a ton of cash along with its CURRENT POSITIVE QUARTERLY CASH FLOWS (~$6 million/quarter) to fund the drilling of Pekisko and Beaverhill formations until the production and eventually the credit facility starts rising again.
Both Pekisko and Beaverhill are PROVEN oily plays.
SCS has spent big in INFRASTRUCTURE the last 2 quarters to lower its operating costs. Its operating costs are also significantly lower effective Q4 2012 because SCS is not the operator any more. So I expect the NETBACK of $40 to rise further in 2013.
SCS has already one of the highest netbacks in the sector, do not ignore this.
This is the presentation that proves my saying
https://www.secondwavepetroleum.com/documents/pres/SCS-presentation_2012_06.pdf