Samson’s net monthly production, for the last six months, is as follows:
BO: Barrels of oil
BOE: Barrels of oil equivalent (gas converted at its heating value)
BOPD: Barrels of oil per day
MCF: Thousand cubic feet
BOEPD: Barrels of oil equivalent per day
April’s oil production was higher than prior months because additional wells were bought on line during that month. Currently all of the wells except for one well (Matilda Bay 2 which is undertaking a work over) are on line.
North Stockyard has a total well count of 23 wells made up of 14 middle Bakken, 8 Three Forks bench 1 (TF1), and 1 Three Forks bench 2 (TF2) wells. Rainbow has a single middle Bakken well. The status of these wells at the end of April was as follows:
|Middle Bakken||TF 1||TF 2||Total|
The hedged portfolio is as follows:
|Calendar year||Volume bbls.||Floor||Ceiling|
|Calendar year||Volume bbls||Sub Floor||Floor|
As at May 11th, 2015 the book value of the hedge was approximately $250,000, valued by Samson’s counterparty.
BORROWING BASE REAFFIRMED
Samson’s debt facility agreement includes the requirement to submit periodic third party determined reserve estimates, which are used by the bank to determine the borrowing base using the bank’s internal price forecast and discount rates on the various reserve categories. This determination is done semi-annually (December and June) and Samson has the right to request a third annual redetermination at its choosing.
As previously advised Ryder Scott determined our reserves as at March 1st, 2015 with a proved reserve valued at $37 million, and our bank has used this estimate to determine our borrowing base of $19 million which is the current outstanding amount. Thus Samson is in compliance with the collateral required to secure the loan amount.
The bank has also agreed to waive the breach in the March quarter EBITDA covenant recognizing that this is largely due to the prevailing oil prices and the shut in of several wells in the North Stockyard field. With these wells expected to come on line during May and the recent uptick in oil price Samson expects to be in compliance with this covenant in the June quarter and thereafter.
The facility agreement carries a variable interest rate of LIBOR plus 3.25%, currently estimated to be 3.75%.
The previously advised reserve estimate developed on the NYMEX forward curve as at March 1st is set out below. It is worth noting that since that date the NYMEX curve has appreciated approximately 14%. This price movement should reflect positively on both the volume and value increases in subsequent reserve estimates.
Samson commissioned Ryder Scott Company to determine its reserve as at March 1st. This was done to capture the Proved Developed Producing reserves value from several additional wells bought on line in North Stockyard after January 1st, the date of our last report. The net present value (NPV10) was calculated at a 10% discount rate using the New York Mercantile Exchange (NYMEX) strip price adjusted for regional differences. As of March 1st, 2015 our reserves and NPV10 are:
|Plant Products MBBLS||1||1|
|NPV 10 M$||$27,360||$10,093||$37,453|
NYMEX strip price and gas price assumptions:
|Oil per BBL||$55.38||$62.62||$65.40||$67.32||$68.98||$70.80||$71.55|
|Plant Products per BBL||$19.38||$21.92||$22.98||$23.62||$24.14||$24.78||$25.04|
|Gas peer MMBTU||$2.87||$3.19||$3.47||$3.60||$3.70||$3.80||$4.13|
An extended flow test of the Permian aged “9,500 sand” has commenced with the well currently flowing 12.3 MMcf/D of gas at a flowing pressure of 2,000 pounds per square inch gauge, on a 30/64ths choke.
This reservoir had previously been flow tested at around 8 MMcf/D of gas comprised 97% nitrogen and 3% hydrocarbons. Various technical analysis has suggested that a fluid boundary is evidenced within the reservoir volume and this test is designed to produce a portion of the gas cap and to observe whether the fluid beneath the gas cap is either water of oil. Reservoir simulation would suggest either oil or water would be seen in around 120 days.
Periodic shut-ins to observe the pressure response will be undertaken along with collections of gas samples.
Samson has filed its Form 10-Q report for the quarter ended March 31, 2015 and that document is available on the Company’s website.
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 MKT under the symbol “SSN.” Each ADS represents 200 fully paid Ordinary Shares of Samson. Samson has a total of 2,837 million ordinary shares issued and outstanding (including 230 million options exercisable at AUD 3.8 cents), which would be the equivalent of 14.185 million ADSs. Accordingly, based on the NYSE MKT closing price of US$1.49 per ADS on May 11th, 2015, the Company has a current market capitalization of approximately US$20.5 million (the options have been valued at an exchange rate of 0.7885). Correspondingly, based on the ASX closing price of A$0.008 for ordinary shares and a closing price of A$0.002 for the 2017 options, on May 11th, 2015, the Company has a current market capitalization of approximately A$23.2 million.