DENVER & PERTH, Australia--(BUSINESS WIRE)--Samson Oil & Gas Limited (ASX: SSN) (NYSE AMEX: SSN) announced today that it has closed its purchase of 20,028 acres of oil and gas leases in the Fort Peck Indian Reservation in, Roosevelt County, Montana, from the Fort Peck Energy Company LLC (FPEC).
Samson’s new Roosevelt Project is being acquired in three tranches:
Tranche 1, which closed today, is a 100% working interest in a 20,028 acre block that carries with it an obligation for Samson to drill two wells.
Tranche 2 is an option to acquire a 100% working interest in 20,000 additional acres from FPEC that Samson will earn upon the completion of the initial two wells in Tranche 1. The Tranche 1 and Tranche 2 areas are mainly contiguous.
Following the drilling of the two appraisal wells in Tranche 1, FPEC will have the right to back into a 33.34% position in both tranches by reimbursing Samson’s acreage and drilling costs to the extent of that equity. In such an event, Samson will have a 66.66% working interest and a 53.34% net revenue interest.
Tranche 3 is a 50,000 acre area covered by an Area of Mutual Interest where Samson and FPEC have agreed to jointly acquire additional leases, with Samson holding a 66.66% working interest (53.34% net revenue interest) and FPEC a 33.34% working interest.
Samson has already been actively pursuing drilling permits for three drilling locations. The Australia IV 12 KA 16 location has been approved and 20 inch casing has been set. The Australia II 12 KA 6 and the Gretel II 12 KA 3 locations have been staked.
Two of these three locations will be drilled this northern hemisphere fall to test the middle member of the Bakken Formation. Both wells are planned to be drilled as 4,500 foot laterals and then fracture stimulated using a multi stage, external casing packer completion technique.
As previously advised, Samson has contracted with Halliburton’s (NYSE: HAL) Consulting and Project Management business line to provide well construction planning, as well as drilling and completion supervision for the initial two wells. This represents and expansion of the relationship with Halliburton developed through Samson’s Hawk Springs project, bringing Halliburton’s expertise, as the largest service provider of fracture stimulation completions to the Roosevelt Project.
Samson’s Ordinary Shares are traded on the Australian Securities Exchange under the symbol "SSN". Samson's American Depository Shares (ADSs) are traded on the New York Stock Exchange AMEX under the symbol "SSN". Each ADS represents 20 fully paid Ordinary Shares of Samson. Samson has a total of 1,996 million ordinary shares issued and outstanding (including 271 million options exercisable at AUD 1.5 cents), which would be the equivalent of 99.8 million ADSs. Accordingly, based on the NYSE AMEX closing price of US$3.28 per ADS on April 18th, 2011 the company has a current market capitalization of approximately US$325 million. Correspondingly, based on the ASX closing price of A$0.165 on April 18th, 2011, the company has a current market capitalization of A$324 million. The options have been valued at their closing price of A$0.15 on April 18th, 2011 and translated to US$ at the current exchange of 1.05 for the purposes of inclusion in the US$ market capitalization calculation.
For and on behalf of the board of
SAMSON OIL & GAS LIMITED
TERRY BARR
Managing Director
Statements made in this press release or related announcements that are not historical facts may be forward looking statements, including but not limited to statements using words like “may”, “believe”, “expect”, “anticipate”, “should” or “will.”
Actual results may differ materially from those projected in any forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those anticipated or estimated by any forward looking information.
A description of the risks and uncertainties that are generally attendant to Samson and its industry, as well as other factors that could affect Samson’s financial results, are included in the Company's registration statement and report to the U.S. Securities and Exchange Commission on Form 20-F, as amended, a copy of which is available at .sec.gov/edgar/searchedgar/webusers.htm.