Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN):
TOTAL COMPANY PRODUCTION
Samson net production for 2014 is as follows:
Q1 Q2
Q3 October November OIL, BO
29,408 50,553 35,576 6,016
17,619 GAS, MCF 48,518 50,928 46,710
12,086 9,363 BOE 37,494 59,041 43,361
8,030 19,180 BOEPD 416 656 481
260 639
The North Stockyard field saw an increase in production for
November as wells were returned to production. We are expecting
that the field will be largely “on stream” in January 2015 as the
infill development comes to a close. In-field operations has
necessitated, for safety and operational reasons, existing wells to
be shut in whilst this activity was undertaken.
With the completion of Ironbank 6 expected later this week,
Frontier 24 will be laid down and no further drilling in the field
is contemplated in light of the recent slide in the oil price. We
are however anticipating that the existing inventory of 3 wells
will be fracked, and the 5 wells that have been fracked will
require a clean out. This means that 8 wells will be brought on
line in the near term.
HEDGE BOOK
Samson has the following hedges in place:
Calendar year
Volume bbls. Floor Ceiling 2014 1,672
$90.00 $99.30 2015 18,270 $85.00
$89.85 2016 2,788 $85.00 $89.85 Calendar year
Volume bbls. Average per month Swap 2014
4,588 4,488 $97.92 2015 39,791
3,316 $92.61
As at December 15th, 2014 the book value of the hedge was $2.4
million as valued by Samson’s counterparty.
NORTH STOCKYARD PROJECT, WILLIAMS COUNTY, NORTH
DAKOTA
The infill development plan for North Stockyard consists of 8
middle Bakken wells that have been drilled and 22 Three Forks wells
of which 9 have been drilled (8 in the First Bench and 1 in the
Second Bench). Given the infill development curtailment there will
remain an undrilled balance of 13 wells. For ease of reference, the
current status of each well is set out below with separate tables
for each drill pad:
TOFTE 1 PAD
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum toDate BO
Billabong2-13-14HBK
6,147 ft. Bakken
Frack scheduled for January
NA NA NA
Sail and Anchor4-13-14HBK
6,375 ft. Bakken
Shut in for frack program
1,323 SI 54,978
Blackdog3-13-14 HBK
8,383 ft. Bakken
Shut in for frack program
1,995 SI 109,878
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum toDate BO
Tooheys4-15-14HBK
6,740 ft. Bakken On production 1,078
340 62,805
Coopers2-15-14HBK
6,360 ft. Bakken On Production 556
288 53,476
Little Creature3-15-14HBK
7,578 ft. Bakken Shut in for frack program
501 SI 72,284
MATILDA BAYPAD
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum toDate BO
Matilda Bay2-15-HBK
4,215 ft. Bakken On Production 1,117
110 29,159
Matilda Bay1-15-HBK
4,215 ft. Bakken On Production 318
184 8,979
TF NORTH PAD
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum toDate BO
Bootleg4-14-15TFH
7,211 ft. Three Forks 1 On Production
NA 650 41,178
Bootleg5-14-15TFH
7,495 ft. Three Forks 1 On Production
NA 690 31,909
Ironbank4-14-13TFH
7,466 ft. Three Forks 1 Flowback commenced
needs a CTU cleanout NA NA NA
Ironbank5-14-13TFH
7,495 ft. Three Forks 1 Flowback commenced
needs a CTU cleanout NA NA NA
TF SOUTH
PAD
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum toDate BO
Bootleg6-14-15TFH
6,867 ft. Three Forks 1 Frack completed
NA NA NA
Bootleg7-14-15TFH
6,973 ft. Three Forks 1 Frack completed
NA NA NA
Bootleg8-14-15TFH
6,771 ft. Three Forks 2 Frack completed
922 NA 922
Ironbank6-14-13TFH
7,434 ft. Three Forks 1 Drilling lateral at
18,464 ft. NA NA NA
Ironbank7-14-13TFH
7,458 ft. Three Forks 1 Drilling completed
NA NA NA
#The Avg. Daily rate is an average of the last week’s
production or the average after the well was put back into
production. 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
NA: Not available APD: Application for Permit to Drill IP Rate:
Gross first 24 hour oil rate Current rate BOPD: Barrels of Oil per
Day Cum to Date: Cumulative gross BO
Samson’s working interest and its net revenue interest for the
North Stockyard Project is set out in the following table:
Well Working
interest Net revenue Interest Billabong
2-13-14HBK 28.77220% 22.01073% Sail and Anchor
4-13-14HBK 25.028509% 19.146809% Blackdog 3-13-14H
24.863526% 19.020597% Tooheys 4-15-14HBK
28.232033% 21.597505% Coopers 2-15-14HBK 28.232033%
21.597505% Little Creature 3-15-14H 27.759719%
21.236185% Matilda Bay 2-15-H 32.972255% 25.223775%
Matilda Bay 1-15-H 32.972255% 25.223775% Bootleg
4-14-15TFH 28.386344% 21.715553% Bootleg 5-14-15TFH
28.386344% 21.715553% Ironbank 4-14-13TFH
26.746521% 20.461089% Ironbank 7-14-13TFH 26.746521%
20.461089% Bootleg 6-14-15TFH 28.386344%
21.715553% Bootleg 7-14-15TFH 28.386330% 21.715553%
Bootleg 8-14-15H 28.386330% 21.715553% Ironbank
6-14-13TFH 26.746521% 20.461089% Ironbank 7-14-13TFH
26.746521% 20.461089%
RAINBOW PROJECT, WILLIAMS COUNTY, NORTH DAKOTA
Gladys 1-20H (SSN 23%)
The Gladys 1-20 H well has been drilled by Continental Resources
to a total depth of 19,994 feet. The well is a 1,280 acre lateral
(approximately 10,000 feet) in the middle member of the Bakken
Formation.
Laterallength
Objective Status
IP rateBOPD
Avg. RateBOPD#
Cum to DateBO
Gladys 1-20H 9,558 ft. Middle Bakken flowing
717 270 30,781
HAWK SPRINGS PROJECT, GOSHEN COUNTY, WYOMING
BLUFF 1-11 (SSN 25%)
As previously reported the 9500 ft. sand was flow tested at 8
mmcfpd and then the well was shut-in for 10 day build-up using down
hole gauges. Samson has a 25% interest in the Bluff well but owns a
52% of the entire Bluff prospect, the differential is due to Bluff
being drilled with some partners who don’t lease in the whole
project.
Gas Analysis
As expected the gas samples have returned a high concentration
of nitrogen with some helium present and a small amount of
hydrocarbons:
Element Chemical mol. %
Nitrogen 97.58 Hydrocarbon 2.08 Helium
0.152 Carbon dioxide 0.17 Argon
0.012
Reservoir Pressure
The buildup data has determined that the original reservoir
pressure within the 9500 ft. sand is 3,459 psi. This data and that
obtained from the water saturated 9500 ft. sand in the nearby SOA#2
well enables a column height calculation to be undertaken. The
SOA#2 well provides an insight into the water gradient in the area
and using that and the reservoir pressure in Bluff establishes a
column height of approximately 1,400 feet, assuming that both the
Bluff and SOA#2 are in the same hydraulic system. Whilst there are
inherent inaccuracies in this calculation, the column height is
consistent with the 1,400 feet of closure mapped within the
stratigraphic trap, as determined by the amplitude anomaly.
Reservoir Parameters
The 9500 ft. sand returned an impressive flow rate and the
buildup data has established a permeability of 330 md or a total of
5.3 darcy feet for the completed interval.
Pressure Transient Analysis
This analysis is complex and is still in a preliminary stage,
but there are some early conclusions that can be reached:
1) There is an apparent fluid boundary within
the total reservoir. The analysis can’t distinguish between that
fluid boundary being oil or water, but given the column height
calculated from a different data set, it would be logical for this
fluid boundary to be oil rather than water.
2) The total reservoir volume represents a
gas in place (GIP) of 35 BCF if the entire container was gas
filled. This compares well with the volumetrics calculated from the
3D derived map which returned a GIP of 37 BCF. It is recognized
that in both of these calculations, the gas can be replaced by a
quantity of oil depending on the establishment of the nitrogen/oil
contact.
3) One solution in the transient analysis
suggests that the gas reservoir has a volume of 5.3 BCF and
accordingly the balance of the reservoir volume would be occupied
by oil and would be estimated at 20 million barrels of oil in
place. Typical recovery factors are around 25% and thus 5 million
barrels might be recovered in this scenario.
It should be emphasized that the discussion above represents our
current understanding and should not be construed as an opinion as
to a reserve estimate. This will come in due course, and will
require the drilling of a down dip appraisal well to prove
reservoir continuity and fluid content.
Forward Program
The data gathered thus far from the Bluff flow test has been
very encouraging and we are pursuing several avenues to establish
an investment case for down dip appraisal well:
1) Isotope analysis of the gas samples: this
analysis will deliver an understanding as to the source of the gas,
principally if it is inorganic or organic. The presence of
hydrocarbons would suggest an organic source, however confirmation
of this will allow the presence of an oil column to be
theoretically possible.
2) Seismic attribute processing: the 3D
seismic data is now able to be fine-tuned with the knowledge of the
contained fluids at the Bluff and SOA#2 wells. This reprocessing
may enhance the ability of the 3D data to distinguish between gas
and a fluid, which in turn would lead to a better choice of a
step-out location.
3) In the event that the entire Bluff
prospect is filled with nitrogen it is possible that this gas can
be commercialized. Very preliminary discussions with an industrial
gas company would suggest that there is a market for this gas in
the oil field service sector where it is used as a frack and
cleanout fluid. Whilst liquid nitrogen is typically manufactured
from the atmosphere this process requires the gas to be compressed
from an atmospheric pressure of 14.7 psi and that process accounts
for about 50% of the cost which would largely be avoided using the
Bluff well head pressure. We understand that liquid nitrogen
supplied to the energy sector is priced at around $20 per mcf. This
final product pricing would suggest that there is a significant
margin available for field produced nitrogen.
4) In the event that a cryogenic plant to
produce liquefied nitrogen is economically feasible then that
process would enable the small amount of helium to be extracted as
adjunct to that process. We understand helium has a current market
value of around $185 per mcf.
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 20 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 141.85 million
ADSs. Accordingly, based on the NYSE MKT closing price of US$0.20
per ADS on December 15th, 2014, the Company has a current market
capitalization of approximately US$27.7 million (the options have
been valued at an exchange rate of 0.8236). Correspondingly, based
on the ASX closing price of A$0.012 for ordinary shares and a
closing price of A$0.005 for the 2017 options, on December 15th,
2014, the Company has a current market capitalization of
approximately A$34.9 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, CEO, 303-296-3994 (US
office)970-389-5047 (US cell)