positive remainder of week?, page-20

guys, lets get back to discussing Samson and ignore the rubbish.

Here is the report from Enercom on Samsons trip to New York to visit analysts....

note the 15 additional clerks hired for Goshen office alone - wow!


"Note from The Road: Samson Oil & Gas Limited (NYSE Amex: SSN)"

"EnerCom traveled with management from Samson Oil & Gas Limited (NYSE Amex: SSN) meeting with investors in New York City and Boston. SSN is an E&P company with a dual-listing in both the United States and in Australia. The company's management and all of its assets are located in the U.S. Samson's primary producing properties are in the Bakken oil shale play of North Dakota and miscellaneous gas assets in Wyoming (Jonah and Lookout Wash fields of Wyoming).


Niobrara Acreage Sale Status

SSN's deal with an undisclosed large independent E&P company remains on track, as the buyer works to complete its land title work. Interest in the emerging Niobrara oil play in the Denver-Julesburg (DJ) Basin is rising quickly. As a result, leasing activity in Goshen County, Wyoming has been brisk, requiring the hiring of up to 15 additional title clerks in the Goshen County Clerk's office to handle the volume. The backlog forced the buyer of Samson's acreage to delay the closing to September from the original late July date. However, the buyer has deposited $10 million as a gesture of good faith in completing the transaction. Total sale proceeds are estimated to range between $66 and 79 million, depending on the final number of acres included in the deal. The price per acre is fixed at $3,275.

Samson retained a 4.8% overriding royalty interest in the sold acreage and retained 16,000 acres in the northern part of the play. To kick-off development of its remaining acreage position, Samson intends to sell-down a portion of its retained Niobrara acreage through a joint venture with an industry partner who can bring technical and financial resources to the development effort.

Why sell? The company articulates two major reasons. First, the acreage sale gave recognition to the company's acreage position, which it had been accumulating since 2006. The increased visibility of Samson's acreage attracted attention from both investors and potential industry partners, giving the company multiple options for development. Second, the sale injected capital into the company, providing it with liquidity and capital resources to execute on its long-term growth plan on the retained 16,000-acre position without diluting shareholders.

Drilling Update: The Bakken and Beyond

Samson and its partner in the Bakken oil play of North Dakota continue to drill ahead. The company currently has two gross wells producing, two waiting on fracture stimulation and plans to drill two more before year-end. Additional upside exists in the company's existing acreage position from down spacing to 320 acres from 640 acres and potential from the Three Forks/Sanish formation.

2011 Drilling Program and Capital Budget Outlook

Samson is in the early stages of planning its 2011 capital budget. Although Samson is in the nascent stages of its planning process, the company is currently planning to spend $35 million in 2011 on its Niobrara and Bakken drilling programs.

The 2011 development is likely to include two Niobrara wells drilled in the first quarter of 2011, most likely as part of a two-well joint venture with an industry partner. Those wells will help determine the optimal well design and completion techniques for the play and area. Then, Samson is planning to bring two rigs into the play in June 2011 and begin drilling two wells per month. At a gross drilling and completion cost of $4.0 million each, the company's capital plan for the initial 12 wells in the Niobrara would be approximately $24.0 million, net to Samson.

Additional capital is expected to be invested in selective bolt-on acquisitions in the Bakken oil shale play.

Based on the company's current expectation of a 2011 capital budget of $30 to $40 million for the Niobrara, closing the Goshen County acreage sale should provide Samson enough capital to execute its drilling program without having to tap the capital markets.

Catalysts and Data Points

Ever since the #2-01H Jake well drilled by EOG in Weld County, Colorado returned production of 1,558 barrels of oil per day (BOPD) from a 3,800 foot lateral and made 50,000 barrels of oil in its first 90 days of production, the Niobrara has become something of a neo-Bakken oil play. The industry recognizes that the Niobrara is still in its early stages of development and few wells have been drilled using state-of-the-art horizontal drilling and completion techniques. At this time, all eyes are focused on the Silvertip 04-34 H and Silvertip 05-34 H wells. Both are being, or have been, drilled by EOG nearby Samson's Goshen County acreage. Both wells are still on the Wyoming confidential list and are expected to come out of confidential status in mid-September.

Investor Q&A

Here are some of the questions posed to Samson management by investors during one-on-one meetings:

? What is Samson's capital budget for 2011?
? When will Samson spud its first operated well?
? How does the Niobrara compare to the Bakken?
? Is the Bakken core, or non-core to Samson?
? Which two wells in the industry are the most interesting with regard to testing the potential of the Niobrara?
? What drove Samson to the Niobrara in the first place?
? Is Samson interested in M&A opportunities?
? Where else is the company exploring?
? How does Samson plan on developing its 16,000 retained acres in the Niobrara (Hawk Springs) project?
? Does Samson plan on developing its 16,000 retained acres on 320 or 160-acre spacing?
? Do you see any sea changes in natural gas fundamentals?
? How much will Samson spend on the Niobrara, Bakken and/or other plays in 2011?
? What are the next wells to be drilled that will be good analogs for Samson's Goshen County Niobrara acreage?
? Who is choosing the location of Samson's next well?
? Will Samson need to return to the market for additional capital?
? How come Samson has no assets in Australia?
? What do coal exports to Europe have to do with U.S. natural gas fundamentals?
? Does Samson plan to increase its Bakken position?

Investor Sentiment

During our meetings with investors in New York City and Boston, we observed the following trends in investor sentiment:

? Natural gas fundamentals remain bearish. Investors are wary of companies that drill merely to hold acreage. Although they understand the strategic reasons for doing so, it pains them to see companies investing hard-won capital in a market with weak fundamentals.
? Oil investments are favored. Oil prices continue to find resistance at $80/Bbl and above and support at $70/Bbl and below, within OPEC's stated ideal price target for 2010. Recent news about moderating Chinese economic growth and the potential of a slowdown of the current global economic expansion has dampened some bullish sentiment, however, mitigating the downside are expectations of continued expected oil production declines in Mexico, Venezuela and Russia.
? OilService costs are increasing and pricing strength from service companies is likely to continue through 2010, but then weaken starting in the first quarter of 2011.
? In the Bakken play, it is estimated that 140 rigs are drilling wells, but there are only 18 frac crews available. Improvements in productivity and rig crew efficiency have reduced the time required to drill a well to total measured depth from 60 to 30 days. Assuming it requires one week to frac a well, there is capacity in the Williston Basin to complete about half the number of wells being drilled. This constraint helps explain the recent acquisition of Superior Well Services (Nasdaq: SWSI) by Nabors Industries Ltd. (NYSE: NBR) in the wake of the Patterson-UTI Energy, Inc. (NYSE: PTEN) acquisition of the pressure pumping and wire-line businesses from Key Energy Services, Inc. (NYSE: KEG). Having frac crews readily available keeps rigs working and develops a preference for drillers who can bundle a critical line-up of services in our time-sensitive industry. We expect additional consolidation in the OilServices sector as other drilling contractors look to complete their line-up of service offerings."