Hi Mufc, I haven't even read it ... Survival? Depends on how...

Hi Mufc,

I haven't even read it ... Survival? Depends on how much cash is in the company AFTER all the bits they don't seem to be adjusting for (like the payouts).

You still planning to attend the general meeting? Maybe ask TB "challenging questions" in a polite and mild manner and before the meeting moves to voting items, insist that Terry Barr takes shareholder questions. He may not wish to do this (as in he may say DECLINE), so remind him that ASIC and the Australia Institute of Company Directors agree that some of the most important functions of general meetings is to demonstrate board accountability to shareholders by presenting information AND answering questions.

Maybe also state that his response affects your vote (which I doubt – if the resolution is voted down, MOOB forecloses as SSN has been in default with no way to recapitalize … their efforts so this … and SSN becomes insolvent and current shareholders prospects of recovering any cash is near zero). Read them out loud in detail.

Question 1:
Assuming that the Resolution for the Asset Sale is passed and the sale to Eagle Energy is consummated, a “change in control” will been deemed to occur, resulting in the payment of Golden Parachute obligations totalling $1,001,717as follows:
Terry Barr .......... Nil
Robyn Lamont ... $308,000
David Ninke ....... $295,717
Mark Ulmer ........ $398,000

Will this $1,001,717 be deducted from the $6.7M cash balance that SSN has estimated after the sale has completed?


Question 2a:
Assuming that the Resolution for the Asset Sale is passed and the sale to Eagle Energy is consummated, the CEO Executive Compensation agreement, Clauses 2.2 calls for a Sale Bonus to be paid in the event of a disposition of materially all of the company’s assets (“Sold Assets”) equal to not less than 50% and not more than 100% of the CEO annual compensation if the sale is for greater than 133% of Book Value of Asset or 133% of market capitalization. Given that the Enterprise Value of the company is almost entirely comprised of Debt, which accounts for the pitifully low market capitalization and that impairments have reduced the book value of assets, do the Directors of SSN feel that this “Sale Bonus” of between $200K - $400K has been earned? Has there been any shareholder value contributed?
(DO NOT LET DIRECTORS USE the Oil Price downcycle as their excuse. Commodity prices go up and go down ... be prepared and run the company for all seasons.

Question 2b:
Assuming the full bonus of $400K is awarded, will this also be deducted from the $6.7M cash balance that SSN has estimated after the sale has completed.


Question 3:
Can you confirm that hedges at an estimated cost to SSN of $845,000 (Still accurate?) will be closed out upon completion of sale and does this amount need to taken out of the estimated cash balance of $6.7M?

Question 4:
Reserves report of June 2017 and May 2018 have distorted numbers
June 2017
Total Proved = 5,497,000 Bbls of oil with NPV10 = $69.8M
PDP = 3,115,000 Bbls of oil with NPV 10 = $39.49M

May 2018
Total Proved = 568,000 Bbls of oil and NPV10 = $6.89M
PDP = 70,000 Bbls of oil with NPV10 = $0.97M

Please explain, what accounts for PDP% to drop from 56.7% to 12.32%?
June 2017 ... PDP = 3.115/5.497 = 56.7% of Reserves
May 2018 ... PDP = 70/568 = 12.32% of Reserves

What has led to this huge reduction in Relative PDP to Total Proved reserves as clearly SSN did not produce anywhere near that amount of oil (taking into account the sale to Eagle) to cause this reduction in the percentage of PDP reserves.

Question 5:
Does the board consider Terry Barr as the most qualified and capable CEO to lead SSN post the sale to Eagle, given that in the last 5 years shareholder equity in the business has dropped to (data from company filings) :
30^th June 2014: US$53.6M
31^st Dec 2017: US$1M (from interim financial report)
Equals a 98% in shareholder equity in the business over that period of time.