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Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN):
NORTH STOCKYARD PROJECT, WILLIAMS COUNTY, NORTH DAKOTA
As part of Samson’s broader financing plan to ensure its participation in the full development of the North Stockyard project, Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN) has today agreed to divest half of its equity position in the undeveloped acreage in the North Stockyard project to Slawson Exploration Company, Inc. (SECI) and a third party for $5.562 million in cash and other consideration.
Samson has retained its full interest in currently producing wells in the field. As a consequence of the transaction Samson and Frontier have terminated the Rig 24 contract (with no penalty payment) and Slawson has contracted the rig for the ongoing development of the North Stockyard project.
The sale agreement calls for Samson to receive cash consideration of up to $5.562 million. Along with the undeveloped acreage, Samson will transfer a 25% interest in the drilled but not yet completed Billabong and Sail and Anchor wells. The cash portion of the purchase price is subject to the delivery of a useable wellbore in Billabong, valued by the agreement at $891,000, and other customary post-closing adjustments.
As a result of this transaction, Slawson will become the operator of the project going forward. Accordingly, Slawson is mobilizing the Frontier 24 rig to the Tofte 2 pad, for the drilling of two middle Bakken wells.
Slawson has indicated that it intends to pursue the 160 acre infill development of both the middle Bakken and first bench of the Three Forks. Slawson is an experienced Bakken operator that is already employing the Frontier 16 drilling rig, a sister rig to the Frontier 24, on a project south of the Missouri River.
The sale, together with Samson’s other planned financing initiatives, should allow Samson to participate fully in the development of the balance of the Bakken and Three Forks wells that are planned for its North Stockyard acreage. This development is currently expected to include a total of 6 middle Bakken wells and 7 wells in the first bench of the Three Forks.