Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN):
TOTAL COMPANY PRODUCTION
Samson’s net monthly production, for the last six months, is as follows:
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November
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December
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January
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February
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March
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April
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OIL, BO
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17,619
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18,906
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15,221
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22,590
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26,893
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29,821
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GAS, MCF
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9,363
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12,102
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15,384
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21,694
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26,555
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19,064
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BOE
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19,180
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20,923
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17,785
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26,206
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31,408
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32,998
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BOEPD
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618
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675
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574
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845
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1,013
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1,064
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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.
COMMENTARY
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:
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Middle Bakken
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TF 1
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TF 2
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Total
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Well count
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15
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8
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1
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24
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Producing
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14
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8
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1
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23
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Shut in
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1
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0
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0
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1
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HEDGE BOOK
The hedged portfolio is as follows:
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Calendar year
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Volume bbls.
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Floor
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Ceiling
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2016
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2,788
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$85.00
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$89.85
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Calendar year
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Volume bbls
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Sub Floor
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Floor
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2015
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73,500
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45.00
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32.50
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2016
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36,600
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67.50
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82.50
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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.
RESERVES
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:
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PDP
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PNP
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PROVED
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Oil MBBLS
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1,133
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430
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1,563
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Plant Products MBBLS
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1
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1
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Gas MMCF
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1,273
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391
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1,664
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BOE MBBLS
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1,346
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495
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1,841
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NPV 10 M$
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$27,360
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$10,093
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$37,453
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NYMEX strip price and gas price assumptions:
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2015
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2016
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2017
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2018
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2019
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2020
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2021
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Oil per BBL
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$55.38
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$62.62
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$65.40
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$67.32
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$68.98
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$70.80
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$71.55
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Plant Products per BBL
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$19.38
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$21.92
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$22.98
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$23.62
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$24.14
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$24.78
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$25.04
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Gas peer MMBTU
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$2.87
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$3.19
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$3.47
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$3.60
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$3.70
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$3.80
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$4.13
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BLUFF 1-11X
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.
10Q
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.
SAMSON OIL & GAS LIMITED
TERRY BARR
Managing Director
Statements made in this press release 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, including uncertainties
inherent in estimating the methods, timing and results of exploration
activities. 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
prospectus and prospectus supplement for its recent Rights Offering as
well as the Company’s report to the U.S. Securities and Exchange
Commission on Form 10-K, which are available at www.sec.gov/edgar/searchedgar/webusers.htm.
Copyright Business Wire 2015