If all investors read are the headlines, they might believe that the only oil and gas investment opportunities existing today are in the Permian Basin, specifically the horizontal Wolfcamp plays in the Delaware Basin region. But that’s not the case.
If that were the case, investors would be missing out on ideas with relatively low risk, but high potential. One of those ideas is Samson Oil & Gas Ltd. (NYSE, ASX: SSN), which has made a significant transformation of a more conventional nature.
According to a new report from EnerCom, the current gap between SSN’s prevailing share price and intrinsic value provides investors a relatively low-risk opportunity to take a position and profit from the company’s execution on visible growth opportunities.
- 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.
- Development operations at Foreman Butte can be drilled economically at oil prices near $20 per barrel.
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