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Current SSN Stock Info

Samson Oil &Gas Limited (ticker: SSN) is an independent oil and gas company with dual listings on the Australian ASX and the NYSE. However all of the company’s assets and operations are based in the United States, focused on the oil-prone Niobrara and Bakken formations.

On June 24, 3013, the company made a strategic disposition by selling its 30,000 net acre position in Montana, known as the Roosevelt Project, for $13.533 million in cash, to an undisclosed buyer. In addition to the undeveloped acreage, SSN’s interests in the Australia II, Gretel II and Abercrombie wells and their associated leases were also included in the sale.

The sale is expected to close in July 2013.

Use of Proceeds

Samson plans to reinvest the net proceeds from this transaction into drilling infill wells in the company’s existing producing asset, the North Stockyard field. We view this strategic move as a positive since it allows SSN to allocate capital from an unproven project, towards de-risked assets in its proved North Stockyard field. The field has has strong current production rates and holds the potential for an additional 14 horizontal wells targeting the Bakken and Three Forks formations. A map of the company’s North Stockyard Field asset is below. As you can see, SSN is well surrounded by top-tier Bakken operators.

062613SSNMap

Terry Barr, CEO of Samson Oil & Gas Limited told Oil & Gas 360, “We paid around $200 per acre when we first purchased the land. We just sold it for $450 per acre, making a profit off of the land rights.”

OAG360 Comments

Overall, we are encouraged by SSN’s move to rationalize its portfolio of non-core assets to build near-term value by drilling in its de-risked North Stockyard field.

Samson Oil & Gas Limited is not a land bank, or a company that likes to buy and flip properties; however, oil and gas companies occasionally have to high grade their portfolios and allocate capital to less risky projects with greater rates of return. Samson has six locations ready for infill drilling on 160 acre spacing in the North Stockyard field and a total of 14 horizontal Bakken and Three Forks locations providing near-term operational upside that will likely lead to increases in production and cash flow that can be reinvested in Samson’s other projects.

We note that Samson’s capital budget for 2013 is $25 million, which is includes six infill wells in North Stockyard. The net proceeds from the asset sale combined with cash of $16.4 million at March 31, 2013 and $2.9 million raised from a rights offering to existing shareholders completed in Q2’13 provide a higher level of comfort that Samson can fund its growth plan.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. As of the report date, neither EnerCom nor any of its employees has a financial interest in any equity or debt of any company mentioned in this report.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.