Interesting clip they posted this evening. SSN says proven reserves worth $39.6 Million using the NYMEX Pricing and weighted down to $34.1M due to the recent sale to Slawson.
OK I have no reason not to believe the report, but I must ask with a current market cap of $53M where does that leave value to the share holders knowing that they have to spend money to get it out of the ground? I know they have some cash on hand, but the figures are way off if you compare this to a normal E&P company. Usually you will see proven reserves 7-10 times current market cap, but I believe this is the first time I ever saw a negative market-cap in correlation to proven reserves.
If you have 53M in obligations (shareholders equity) and have $34.1M in the Bank (proven reserves) where does that leave you? In my book it leaves you about -18M in the hole. There is cash on hand, but also expenses which seems to be out of hand at this point. What the report shows tonight is the decline rate is more than most probably figured. And of course when you give up 50% of your interest in a lease it doesn't help matters much.
Don't shoot the messenger I'm just reading what the company posted. Probably a very good indicator of why the stock is selling off. Makes you wonder who had this report before hand.