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:
November December
January
February March
April OIL, BO 17,619
18,906 15,221
22,590 26,893
29,821 GAS, MCF 9,363
12,102 15,384 21,694
26,555 19,064 BOE
19,180 20,923
17,785 26,206
31,408 32,998 BOEPD 618
675 574
845 1,013 1,064
BO: Barrels of oilBOE: Barrels of oil equivalent (gas converted
at its heating value)BOPD: Barrels of oil per dayMCF: Thousand
cubic feetBOEPD: 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:
Middle Bakken TF 1
TF 2 Total Well count
15 8 1
24 Producing 14
8 1 23 Shut
in 1 0
0 1
HEDGE BOOK
The hedged portfolio is as follows:
Calendar year
Volume bbls. Floor
Ceiling 2016 2,788 $85.00
$89.85
Calendar
year Volume bbls Sub
Floor Floor 2015 73,500
45.00 32.50 2016
36,600 67.50
82.50
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
$19 million which is the current outstanding amount. Thus Samson is
in compliance with the collateral required to secure the loan
amount.
The bank has also agreed to waive the breach in the March
quarter EBITDA covenant recognizing that this is largely due to the
prevailing oil prices and the shut in of several wells in the North
Stockyard field. With these wells expected to come on line during
May and the recent uptick in oil price Samson expects to be in
compliance with this covenant in the June quarter and
thereafter.
The facility agreement carries a variable interest rate of LIBOR
plus 3.25%, currently estimated to be 3.75%.
The previously advised reserve estimate developed on the NYMEX
forward curve as at March 1st is set out below. It is worth noting
that since that date the NYMEX curve has appreciated approximately
14%. This price movement should reflect positively on both the
volume and value increases in subsequent reserve estimates.
RESERVES
Samson commissioned Ryder Scott Company to determine its reserve
as at March 1st. This was done to capture the Proved Developed
Producing reserves value from several additional wells bought on
line in North Stockyard after January 1st, the date of our last
report. The net present value (NPV10) was calculated at a 10%
discount rate using the New York Mercantile Exchange (NYMEX) strip
price adjusted for regional differences. As of March 1st, 2015 our
reserves and NPV10 are:
PDP
PNP PROVED Oil MBBLS
1,133 430
1,563 Plant Products MBBLS 1
1 Gas MMCF
1,273 391 1,664 BOE MBBLS
1,346 495
1,841 NPV 10 M$ $27,360
$10,093 $37,453
NYMEX strip price and gas price assumptions:
2015
2016 2017 2018
2019 2020
2021 Oil per BBL $55.38
$62.62 $65.40 $67.32
$68.98 $70.80
$71.55 Plant Products per BBL
$19.38 $21.92 $22.98
$23.62 $24.14
$24.78 $25.04 Gas peer MMBTU
$2.87 $3.19
$3.47 $3.60 $3.70
$3.80 $4.13
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 BARRManaging 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.
Samson Oil & Gas LimitedTerry Barr, 303-296-3994 (US
office)CEO