DENVER & PERTH, Australia–(BUSINESS WIRE)–Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN):
Completed Sale of State GC assets
Further to the announcement made on May 12th, 2017, Samson advises that it has closed on the sale of its State GC assets in New Mexico to a private US-based energy company. The sales price of $1.2 million has been received by Samson and applied to pay down Samson’s current facility with Mutual of Omaha Bank. Subject to Samson’s compliance with the terms of the facility, the paid down funds remain available for redraw. Notwithstanding the sale of the State GC assets, Samson’s borrowing base remains at $20 million, in addition to its outstanding $4 million term loan.
Samson expects to record a profit on this sale of approximately $0.6 million (unaudited)
Samson continues to actively develop its production capacity in the Foreman Butte project. Its operated wells in this project produced a record high daily production number of 1,294 BOPD on May 23rd. This gross operated rate is equivalent to 1,000 BOPD net to Samson including its non-Operated production in the same asset. This compares to our March Quarter average oil rate of 720 BOPD (net to Samson).
This most recent increase in production from the Foreman Butte can be attributed to several factors, including pump optimization. For example, a change out to a jet pump on the R Field increased the oil rate from 105 BOPD to 140 BOPD and the installation of an electrical submersible pump in the Riddle well increased daily production of that well from 5 to 20 BOPD
The recent improvement in the WTI oil price, coupled with a better oil price differential suggests a corresponding improvement in Samson’s cash flow and profitability. Samson’s improved differential (the spread between market prices and prices actually received by the producer at the well head) is attributable to the commencement of the Dakota Access Pipeline System, which has increased the pipeline take away capacity in the Williston Basin and lowered Samson’s oil price differential from $6.50 per barrel to $3.85 per barrel.
SAMSON OIL & GAS LIMITED