Samson Resources II to divest Powder River Basin assets

US-based onshore exploration and production company Samson Resources II has signed a definitive agreement to divest all of its assets in Powder River Basin for $215m.

However, the company did not disclose the name of the buyer.

The assets being sold produced around 8,500 barrels of oil equivalent per day (75% oil) last year.

The divestment is a part of Samson’s efforts to shed all its assets to settle its debt and pay its equity owners after it emerged from bankruptcy in 2017.

The proceeds from this all-cash transaction will be used to pay around $13m in debt under its existing reserve-based credit facility and make a cash distribution to its unit holders.

Samson Resources II president and CEO Joseph A Mills said: “We are very pleased to announce the sale of our Powder River Basin assets.

“When this sale closes, it will conclude the four-year process of monetising Samson’s assets and delivering a strong cash return to our equity owners following our emergence from bankruptcy in March 2017.”

The transaction is expected to close on or around 4 March 2021.

Once it closes, Samson Resources II will have sold nearly all of its upstream assets with the exception of 24,000 net leasehold acres, 23,000 net mineral acres and 40 non-operated wells situated in East Texas, Oklahoma and Louisiana.

The company also plans to sell these remaining assets early this year.

Notably, the Oklahoma-based firm was established in 1971 as Samson Investment Company. In 2011, it was acquired by a group of private equity investors for nearly $7.2bn to form Samson Resources.

However, the company entered Chapter 11 bankruptcy in September 2015 following the oil price crash.

It emerged from bankruptcy in March 2017 as Samson Resources II and now aims to start the process of liquidation and move towards final dissolution, after all assets are divested.