results announcement, page-167

dont worry a few knuckles that dont understand how it works

1) He gave no specific timing so could be 6 months could be 3 years - he was at a conference in US trying to sound bullish - its a sound bite with no firm commtment or date - wont happen for ages - you do the full listing when things a re looking rosy - zero advantage in doing now and liquidity would all but dry up (ie no volume) on a US listing

2) knuckles - if you actually know how passive funds work you would know that the funds mandate they keep the weighting in line with the index - they just cant sell out thinking in 2 years they might not be listed on ASX - returns wouldnt match the index and presto mandate busted. I think more the worry ids that they get booted out and replaced because the volume is so low - they not going to keep a dead rubber in the index and thats likely to happen sooner then any full NYSE listing

3) you guys are not understanding the liquidity problem I have hghlighted with Dimmitt and how serious that could turn if the market deteriorates, and the line is cut. If you cant get to +FCF and you still keep prodn at a fair pace then you are having to draw down on your line which decreases available liquidity and because of the walking the tightrope management you end up being in a position whereby you have to sell aportion of better performing assets just to keep the bankers happy - you dont want to have to do that.

in other words whilst they do today have liquidity available, because of the balance sheet position if you dont get to +fcf soon you end up utilising your available line over time and as no cash buffer would be built up you are eventually forced to sell down better assets as no one wants to buy the shite.

Other then selling Dimmitt the solution of course would be to slow prodn right down and basically what investor wants to hang around for zero return on investment.

So what the market is telling you is fairly simple - uncertain market growth = uncertain oil price whith down bias and at sub $50 prices SEA will be going nowhere fast - therefore aint going to put any money into it until picture becomes clearer.

1) Need to sell Dimmitt - that is a necessity
2) need to operate within cashflows and need to do soon - you might find prediction of 17kboepd might get downgraded later (if market deteriorates)

if your an inst investor looking at todays macro picture - SEA is not where you going to turn to.

Need oil over 60$ for extended period - so question for all is what is going to make that happen and do you assign a high probability to that outcome - if so buy away - if not tread carefully.