worth a little research

Samson Oil & Gas (SSN) may be worth some research.
Positives:
1. Since October far greater turnover in stock, with unusually high volume on the 8/1/2010 with 74.2m traded. Chart looks like it has finally bottomed after shares have traded as low as 1 cent.
2. SSN at $18m Market Capn (1,284m shares @ 1.4 cents) offers leverage when compared to peers i.e. Buccaneer $40M., Red Fork $134M., Horizon Oil $450M..
3. Experienced MD in Terry Barr who is based in US, he has had 35 years experience including Exploration Manager for Santo in the Cooper Basin.
4. Production & cash flow already. September Quarterly shows production volume & sales revenue increased for both oil & gas over prior quarter (Revenue up from ($917,686 June to $1,085,016 September) Refer September Quarterly.
5. Stronger growth in both oil & gas prices after September Quarter should make the December Quarterly even better.
6. Good exposure to the Bakken Shale in the Williston Basin, North Dakota. the Bakken is much like the enormous natural gas field that sat for many years under and around Dallas until people figured out the geology and how to drill it out economically, says Lucian Pugliaresi, President of the Energy Policy research Foundation. Theres at least a smell of the Old West as petroleum companies rush to stake their claims in the Bakken Play (refer Jim Ostroff, the Kiplinger Letter March 17, 2008). Note that the Bakken Play is not an environmentally sensitive area similar to Alaskan tundra that has stymied much oil field development because of concerns about damage to the fragile environment.
7. Recent capital raising and debt repayment puts the company back in compliance with the loan facility. Samson has now achieved a debt facility balance that is conservative compared to its producing reserves value (refer ASX announcement 7/12/2010).
8. Listed on AMEX in the US where the market better understands and appreciates the potential of the companys Bakken Shale Play. US company Brigham Exploration announced on the 5/1/2010 its State 36-1# Bakken Well had produced at an initial rate of 3,807 boepd. This well is just 4 miles from Samson Oil & Gas Gene1-22H Well.
9. SSNO with an expiry date of November 2012 and an exercise price of 1.5 cents offers excellent leverage to the shares if the shares move up.
10. Gene 1-22H in Williams County, North Dakota expected to be spudded on 20/1/2010 (30% working interest). Refer ASX announcement 7/1/2010)
11. Ripsaw (Texas Gulf Coast Basin- 100% interest) expected to be spudded towards the end of January 2010.
12. AGM Presentation 2009 shows Gas Production with NPV of $26.3m. and oil production of $14m. with potential to significantly grow both these figures (total $41.3M. valuation of 2P reserves). Immediate growth prospects from prolific Texas producers and also Bakken oil production.
13. Experienced management team that includes Neil MacLachlan as chairman (EX Vice President Barrick Gold Corporation). Terry Barr over 30 years experience including 11 years with Santos. He has specialized in tight gas exploration, drilling and completion and is considered an expert in this field. (refer 2009 Annual Report). This experience and expertise is invaluable given the exposure the company has to tight gas opportunities in Wyoming and other parts of the US (Refer 2009 Annual Report Page 2). On a $256,763 remuneration package ($287,130-2008) (refer 2009 Annual Report Pages 12/13) for the year ended 30/6/2009 he represents very good value.
14. Given recent activity in BCC/VIL some interest could also flow into SSN as drilling approaches. It would appear buyers are currently happy to just accumulate stock from sellers who have just taken stock in the most recent issue.
15. Company could be re rated after debt issue has been resolved.
16. 4 Wells planned in 2010 program
17. September Presentation (Page 33) shows Enterprise valuation of 3.3 cents per share after recent issue based on resources & proposed expenditure & development. This valuation excludes Baxter (US $150m.) & Pierre (US $450m.)
Negatives:
1. Large number of shares on issue (1,284,000,000) at 1.4 cents gives Market capn of approximately $18m.
2. Some hedges in place limit upside to increasing oil and gas prices. ASX announcement on 17/11/2009 referred to some positions closed out but still looks to have 50% of production hedged.
3. New shares only recently became available (refer ASX Announcement 7/1/2010) so some shares could be in loose hands for a while. Also ASX Announcement of 12/10/2009 indicated 879.9m shortfall that had to be dealt with by underwriters, this is a large quantity to bed down with new long term shareholders.
4. Directors dont have significant holdings in the company relative to number on issue.
5. Debt facility only a problem if falling energy prices cause breaches of loan facilities, (around $9.2m.).
6. Bakken Oilfield is a continuous oilfield. So with the United States Geological Survey has recently reported that less than 1% of the upper end of 503 billion barrels at the site are readily accessible, meaning pooled into deposits large enough to be commercially viable. The remainder of the oil is distributed thinly throughout the area. But higher oil prices and new technology may make the effort worth it i.e. horizon drilling
7. Given SSN listing on AMEX, arbitrage may see greater interest in shares and options ignored by potential overseas buyers.
Conclusion: Recent high turnover indicates stock is being accumulated ahead of the 2 wells being spudded, but it may take some time for all the loose stock from the recent issue to be absorbed by the market.
Please note no investment advice is given nor any guarantees on accuracy of the information above, each investor/trader should do their own research on SSN because this is a highly speculative stock & carries considerable risk.
If you think this information may be of benefit to other HC members feel free to give it the up thumbs, if not use the thumbs down.
Regards
Buffett