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Samson Oil & Gas sells interest in US North Stockyard field


1 November 2016

Australian company Samson Oil & Gas has sold its interest in the North Stockyard field in North Dakota, US, in a deal valued at $15m.

The company plans to use $11.5m of the sales proceeds to reduce the outstanding amount on its debt facility to $19m.

Furthermore, the balance of the proceeds would be used for working capital, as well as to minimise the company’s existing hedge positions in line with its post-sale production.

The sale will allow Samson to focus on development of its Foreman Butte property that was recently acquired.

"Following the closing and reduction of outstanding balance, Samson expects to negotiate and execute a revised debt facility with Mutual of Omaha Bank early next year."

Since the acquisition of the property, the company has already grown the asset from a proved developed producing (PDP) reserve with a net present value (NPV10) of $22m to a NPV10 of $45m as at 30 June this year.

This has more than replaced the PDP reserve value of North Stockyard of $15m.

Following the closing and reduction of outstanding balance, Samson expects to negotiate and execute a revised debt facility with Mutual of Omaha Bank early next year.

The new facility will give enough liquidity to the company to develop the Foreman Butte project or for any future acquisitions.

The next round of activity in Foreman Butte will be to use a fresh water cleanout workover technique that has been tested in the Evans 1-10 well and demonstrated a doubling of fluid production.

The activity will also involve optimisation of the pumps across the project.

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