2011-02-25-2011-01-25-2011-01-25

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
MM
Description

Entered JV to develope Niobrara & other conventional targets in the northern Denver-Julesburg Basin in Goshen County, consisting of 11,277 gross acres.

Samson Oil & Gas Ltd., Denver, (NYSE Amex: SSN) has entered a three-party participation agreement with Halliburton Energy Services Inc. and its existing private company partner for the evaluation and development of the Niobrara formation and other conventional targets in the northern Denver-Julesburg Basin for part of Samson's Hawk Springs Project in Goshen County, Wyoming.

Samson and its partner will be free carried through the drilling and completion of two wells with approximate 4,500-foot laterals and will be reimbursed for a portion of the cost of the North Platte 3-D seismic survey. Halliburton will acquire 25% equity in the farm-in area (2,819 net acres). The transaction has been structured such that the acquisition cost can be valued at a rate of $3,275 per acre. Halliburton retains the option to not drill a second farm-in well, in which event its 25% equity would be reduced to half the project area (1,410 net acres).

The Halliburton farm-in area consists of a gross area of 11,277 acres, including 6,589 net acres currently held by Samson. Assuming completion of both farm-in wells, Samson's acreage inside the Halliburton farm-in area will be reduced to 4,942 net acres, and Samson's total holdings in the Hawk Springs Project will be reduced to 14,883 net acres, versus the approximately 16,530 net acres currently held.

Following the completion of the earn in program Samson will retain a weighted average royalty of 3% within the farm in area.

As previously reported, the North Platte 3-D seismic data is being processed and the first-pass processing products have been delivered and the conventional plays are being mapped. The data quality is excellent and therefore the fracture identification processing is expected to be definitive. These more sophisticated processing products will be delivered in the coming weeks.

It is Samson's intention to commence the drilling campaign at the end of the first quarter; however, this timing is subject to permitting, drilling equipment availability and the interpretation of the processed data.