From Hydrocarbons Technology

Samson Oil & Gas has signed a letter of intent (LoI) to divest its Foreman Butte project in North Dakota and Montana, US, to a private equity-funded exploration and production company Firehawk Oil and Gas, in a deal valued at $41.5m.

Once the transaction is closed, Samson expects to fully repay its current debt facility with Mutual of Omaha Bank along with its other liabilities, including the company’s hedge book.

Also known as the Home Run field, the Foreman Butte project was acquired for $16m in January 2016. The oil field was developed on a 640-acre spacing pattern. Based on the company’s engineering and geologic analyses, only 3.2% of the original oil in place has been recovered to date.

According to the company, there is potential to recover significant undeveloped oil from the field. The project comprises several producing, non-producing, operated and non-operated wells in the Ratcliffe and Madison formations.

During the year ending 30 June 2017, the wells in the field produced 253,168 barrels of oil and 52,281mcf of gas.

Firehawk will conduct customary due diligence on the properties during a 21-day exclusivity period in order to execute a definitive agreement.

Subject to the approval of Samson’s shareholders, the transaction is expected to be completed by 1 March this year.

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