Samson Oil & Gas: debt reduction, higher borrowing base
Following the closing of the company’s North Stockyard asset sale, Samson Oil & Gas Limited’s (ticker: SSN) outstanding debt has been reduced to $19 million and Mutual of Omaha Bank has increased the company’s borrowing base to $20 million.
Samson expects the Bank to further increase its borrowing base in the first quarter of 2017 as part of a new syndicated loan involving another bank. The scope of the expanded debt facility will depend on the value of Samson’s Proved Reserves as at November 30th which in turn will depend on commodity pricing and well performance, the company said in a statement.
The closing of the North Stockyard sale and paydown of the debt was a condition of the loan facility amendment that financed the acquisition of the Forman Butte project. That amendment also required Samson to raise a total of $5 million in equity. The Bank has now agreed that this condition has been met.
Samson said it does not intend to raise additional equity capital at this time.
According to the highlights from a recent EnerCom Catalyst Report on Samson Oil & Gas, Limited:
- The PV-10 value of SSN’s total pro forma proved reserves value of $110.7 million, net of debt and accounting for cash, implies an NAV per share for Samson at $5.52;
- On a per share basis using PDP reserves only, we estimate Samson’s NAV at $1.57, as compared to the closing value of the Company’s shares of $0.83 on September 12, 2016;
- Samson grew production at Foreman Butte from 300 barrels of oil per day (BOEDP) to now producing about 1,300 BOPD, an increase of over 333%, in less than five months with only $800,000 in capital;
- Samson has identified 17 PUD drilling locations in the porosity fairway of the Foreman Butte Field, and estimates that initial rates of production from the wells will range between 260 and 460 BOPD.
Having recently closed its North Stockyard asset sale in the Williston, and with its newly increased borrowing base and reduced debt level, Samson looks to be gaining position to accelerate production growth in its key asset areas.