Samson Oil & Gas Operational Advisory
DENVER & PERTH, Australia--(BUSINESS WIRE)-- Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN):
NORTH STOCKYARD PROJECT
Samson Oil & Gas Limited (ASX: SSN; NYSE MKT: SSN) advises that it has commenced the necessary preparatory work to begin drilling operations on the Billabong 2-13-14HBK, which are expected to commence in the next 24 hours.
This well will be drilled into the Middle Bakken horizon. The surface casing on this well had previously been set at 2,300 feet. The well will be drilled vertically to a kick off point at 10,824 feet (TVD) and 7 inch casing landed at 11,300 feet (TVD) in preparation to drill the 6,100 foot lateral in the Middle Bakken.
The directional plan has been modified based on the lessons learned from drilling the previously reported Sail and Anchor well to manage the difficult drilling conditions experienced in that well. These modifications have included elimination of the deviation in the vertical part of the hole and the employment of a directional drilling contractor with the ability to use a rotary steerable bottom hole assembly. A rotary steerable bottom hole assembly has superior capabilities to control directional drilling compared to conventional steerable equipment. In addition a lighter mud weight will be utilized in the lateral wellbore, which should increase the rate of penetration.
The decision to drill this second Middle Bakken well rather than fracture stimulating Sail and Anchor was taken for several reasons, including the significant cost savings that can be made by stimulating the Sail and Anchor and Billabong wells simultaneously with a hydraulic fracturing treatment. These cost reductions come from a single rather than multiple mobilization costs of the fracture stimulation and ancillary equipment as well as the ability to conduct a single work over in the offset wells to place bridge plugs to protect those wellbores. These savings are estimated to exceed $1 million.
Accordingly, the forward plan now is to drill and complete the Billabong well and then fracture stimulate the two wells together. In addition to the cost savings, this plan will also allow the fracture systems in both wells to be introduced to a similar pressure regime. This means it is more likely that a more uniform fracture network and stimulated reservoir volume is established between the two well bores rather than a pressure regime influenced by production from the Sail and Anchor well. As a result of this increased stimulated reservoir volume, the ultimate volume of oil recovered should increase from both wells compared to the situation where each well is stimulated independently with a time gap between the two fracture treatments.
The Matson #3-1 well has been drilled to a depth of 4,670 feet and is undertaking a short trip to condition the hole ahead of penetrating the main target zone. This is being undertaken now such that if warranted the zone can be drill stem tested.
The Matson #3-1 well will be drilled to a total depth of 4,900 feet to test a 420 acre 4-way structural closure in the Glenburn zone of the Mississippian Mission Canyon Formation. The Glenburn zone has produced over 2.5 million barrels of oil just 2 miles to the northeast from a similar type of trap at South Glenburn Field.
About Samson Oil & Gas Limited
Samson's Ordinary Shares are traded on the Australian Securities Exchange under the symbol "SSN". Samson's American Depository Shares (ADSs) are traded on the New York Stock Exchange MKT under the symbol "SSN". Each ADS represents 20 fully paid Ordinary Shares of Samson. Samson has a total of 2,326 million ordinary shares issued and outstanding (including 97,307,525 million options exercisable at AUD 3.8 cents), which would be the equivalent of 116 million ADSs. Accordingly, based on the NYSE MKT closing price of US$0.45 per ADS on July 16th, 2013 the Company has a current market capitalization of approximately US$52.87 million (the options have been valued at an exchange rate of 0.92). Correspondingly, based on the ASX closing price of A$0.025 for ordinary shares and an indicated price of A$0.0075 for the 2017 options, on July 16th, 2013, the Company has a current market capitalization of approximately A$58.87 million.
SAMSON OIL & GAS LIMITED
Statements made in this press release that are not historical facts may be forward-looking statements, including but not limited to statements using words like "may", "believe", "expect", "anticipate", "should" or "will."
Actual results may differ materially from those projected in any forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those anticipated or estimated by any forward looking information, including uncertainties inherent in estimating the methods, timing and results of exploration activities. A description of the risks and uncertainties that are generally attendant to Samson and its industry, as well as other factors that could affect Samson's financial results, are included in the prospectus and prospectus supplement for its recent Rights Offering as well as the Company's report to the U.S. Securities and Exchange Commission on Form 10-K, which are available at www.sec.gov/edgar/searchedgar/webusers.htm.
Samson Oil & Gas Limited
Terry Barr, CEO, 303-296-3994 (US office)
970-389-5047 (US cell)
KEYWORDS: Australia United States North America Australia/Oceania Colorado
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