SAMSON OIL & GAS IPAA PRESENTATION. Denver 1230 hours April 19th, 2015, Perth 1430 hours April 20th, 2015

Transcription

1 SAMSON OIL & GAS IPAA PRESENTATION Denver 1230 hours April 19th, 2015, Perth 1430 hours April 20th, 2015 Samson is presenting to delegates at IPAA OGIS New York. Samson s presentation is scheduled for Monday April 20 th at 1140 hours EST, USA or Tuesday April 21 st at 0040 hours EST, Australia. The presentation will be available on Samson s website: The presentation is being webcast and the link is as follows: 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 200 fully paid Ordinary Shares of Samson. Samson has a total of 2,837 million ordinary shares issued and outstanding (including 230 million options exercisable at AUD 3.8 cents), which would be the equivalent of million ADSs. Accordingly, based on the NYSE MKT closing price of US$1.49 per ADS on April 13 th, 2015, the Company has a current market capitalization of approximately US$21.5 million (the options have been valued at an exchange rate of ). Correspondingly, based on the ASX closing price of A$0.009 for ordinary shares and a closing price of A$0.002 for the 2017 options, on April 13 th, 2015, the Company has a current market capitalization of approximately A$26.0 million SAMSON OIL & GAS LIMITED TERRY BARR Managing Director For further information please contact, Terry Barr, CEO on (US office) or (US cell) 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 Samson Oil & Gas USA 1331, 17 th Street, Suite 710, Denver Colorado Tel Fax Samson Oil & Gas Limited Level 16, AMP Building, 140 St Georges Terrace, Perth Western Australia 6000 / PO Box 7654, Cloisters Square Perth Western Australia 6850 Tel Fax ABN ASX Code SSN

2 IPAA NYC, APRIL 2015

3 DISCLAIMER This presentation has been prepared by Samson Oil & Gas Limited and contains information about the Company which may not be complete and should be read in conjunction with its disclosures on the ASX and filings with the Securities and Exchange Commission. The presentation contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding potential drilling programs, the success of the company's business, as well as statements that include the words "believe, expect, anticipate" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Samson Oil & Gas Limited to differ materially from those implied or expressed by such forward-looking statements. 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 Company's report to the U.S. Securities and Exchange Commission on Form 10-K, which is available at This presentation was prepared as April 16 th and Samson Oil & Gas Limited assumes no responsibility to update the information included herein for events occurring after the date hereof. This presentation does not constitute an offer to subscribe to an issue and recipients of the presentation are required to conduct their own analysis. The reserves quoted in this presentation were estimated by Ryder Scott Company ( RSC ), an independent petroleum reserves engineering consulting firm based on the definitions and disclosures guidelines contained in the Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers Petroleum Resources Management Systems. Information contained in this report relating to hydrocarbon reserves was compiled by the Managing Director of Samson Oil & Gas Ltd., T M Barr a Geologist who holds an Associateship in Applied Geology and is a fellow of the Australian Institute of Mining and Metallurgy who has 35 years relevant experience in the oil & gas industry. of the material contained herein prior to making a decision to trade Samson s securities. 2

4 SAMSON OVERVIEW Samson Oil & Gas Limited is a dual national Australian/American oil and gas company holding extensive development and exploration acreage in the USA. KEY INFORMATION ASX NYSE MKT Exchange / Ticker Dual Listed SSN SSN Market Capitalization (1) A$ 26.0 m US$ 21.5 m Shares Outstanding (2,3) FPO 2,837m (2) ADS 14.19m (3) Average Daily Trading Volume (4) 1.7m shares 0.5m ADR s Average Daily Trading Value (4) A$12k US$126k Listed Options Outstanding (5) 229.7m options Cash (6) US$3.9 million Debt (7) US$19.5 million Production (March, 2014) 1,013 BOEPD Proved Reserves (NPV 10 ) (8) MMBOE, $ 37.4 m Oil as Percent of Total Production (9) 85% 1. As at April 13 th FPO Fully Paid Ordinary shares 3. ADS - American Depository Shares (each ADS represents 200 FPO shares and are included in FPO count) 4. For the three months ended Feb 13 th SSN also has 72.5 million unlisted options with various exercise prices and expiry dates 6. As at Dec 31 st As at April 13 th Ryder Scott as at March 1 st, 2015, NYMEX pricing 9. March

5 PROJECT LOCATIONS 2014 Strategy: Developing shale oil resources on the Company s Bakken (Williston Basin) acreage and realization of exploration upside on its Hawk Springs (D-J Basin) Project. North Stockyard Project Rainbow Project South Prairie Project Roosevelt Project Williston Basin Greater Green River Basin D-J Basin Hawk Springs Project Western Permian Basin Gulf Coast Basin 2014 Key Focus 4

6 2015 INVESTMENT STRATEGY Produce existing drilled and completed inventory of North Stockyard and Rainbow wells. Drill the downdip Bluff prospect well, extremely attractive economics at $50 per bbl. Complete the commercial arrangements for a new project area, that is economically attractive at $50 per bbl. Look to recommence middle Bakken Rainbow wells when we see oil price stability exceeding $50 per barrel. 5

7 BAKKEN INVENTORY North Stockyard 13 TF2 well locations dependent of Bootleg 8 performance. Rainbow Gladys is expected to be a 440,000 bbl EUR well based on its recent performance and offset wells with a longer production history. 7 additional middle Bakken well locations available. The reduction in oil price has reduced the capital cost of drilling, fracking and completion. In this environment full cycle breakeven oil price is estimated to be $40 (realized Bakken) or $50 WTI. Plan is to recommence a Bakken drilling program in January 2016, given oil price stability above $50 per barrel. 6

8 RAINBOW ACTIVITY 4TH QTR OF 2014 AND 1ST QTR OF 2015 HESS CRESCENT POINT LATEST COMPLETIONS HESS GN BEULAH: I.P 975 BOPD HESS GN WILLARD: I.P 727BOPD. HESS GN PNR: I.P 679 BOPD HESS GN RING: I.P 636 BOPD CRESCENT POINT NARCISSE: I.P 505 BOPD CONTINENTAL SUMNER: I.P 535 BOPD CONTINENTAL 7

9 RAINBOW PROJECT LOCATION MAP Rainbow Project = Continental = Halcon = Statoil = Kodiak = Hess = Whiting = Crescent Point = Baytex = Samson Res = XTO 8

10 6 MONTH CUMULATIVE OIL PRODUCTION RAINBOW PROJECT North Stockyard 9

11 6/1/2014 7/1/2014 8/1/2014 9/1/ /1/ /1/ /1/2014 1/1/2015 2/1/2015 3/1/2015 4/1/2015 5/1/2015 6/1/2015 7/1/2015 NYSE: SSN ASX: SSN Barrels Oil per Day GLADYS 1-20H PRODUCTION 10,000 CLR Gladys 1-20 Single Lateral Bakken Horizontal Cum Production as of March ,731 BO 1,000 Install ESP Frac Summary 40 stages 8MLbs PPT I.P 717bopd 1 Oil Production Csg GOR Watercut 10

12 RAINBOW PRODUCTION EXPECTED EUR Based off Hess Weyrauch 15-11H well EUR = 441 Mbo 11

13 Gladys 1-20H RAINBOW PROJECT SSN 23% SSN 52% 12

14 BLUFF PROJECT Located in the northern DJ basin Conventional Permian aged play Supported by 3D seismic and two exploratory wells. One dry hole and Bluff which flowed 8 MMCFPD of mostly nitrogen. 3D data set validated with second well determining reservoir quality rock. Reservoir quality proven with an excellent 300 to 500 md of permeability and porosity of 18%. Efficacy of the trap has been proven. 13

15 BLUFF 1-11X ATTRIBUTES Oil fields often have gas caps. Because of the lower density, gas always sits at the crest of a trap. Bluff deliberately drilled at the crest. Critical question to be determined is whether technical data supports the presence of a down dip oil leg. Evidence strings: Gas analysis Pressure transient analysis Reservoir simulation 3D seismic attributes 14

16 BLUFF PROJECT EVIDENCE STRINGS 3D Seismic Reservoir Simulation Pressure Transient Analysis 550,000 Bbls EUR Gas Analysis 15

17 BLUFF 3D SEISMIC 16

18 3D ATTRIBUTES AND SIMULATOR Vp/Vs Inversion Outline Density Inversion Outline ~500ft ~1725ft 17

19 BLUFF 1-11X Pressure transient analysis (PTA) completed after a 40-hour flow test and 240 hour shut in to monitor the pressure response. PTA, an accepted and rigorous industry standard numerical technique, sees changes in permeability and/or fluid type, as the reservoir pressure responds to the preceding flow of reservoir gas. PTA was augmented with a numerical 3D simulator that used the 3D seismic prospect outline. 18

20 BLUFF 3D SIMULATOR Task is to build a numerical simulator that consists in this case of 300,000 cells, and follows the 3D seismic determined outlines. Each cell is given a discrete set of rock and fluid properties. The simulator flows and shuts in the well as it did in the flow test and the pressure response observed. The cell properties are changed as an iterative process to achieve a response match between the actual observed data and the simulated data. 19

21 BLUFF 3D SIMULATOR 10 Type Curve Comparison (Field, Analytical Composite Model, Numerical Simulation) 1 Dy/q or Derivative 0.1 Dy/q field Dy/q comp Dy/q sim Derivative Field Derivative Comp Derivative Sim Superposition Radial Equivalent Pseudo-Time 20

22 BLUFF CONCLUSIONS PTA suggests a fluid boundary ~600 feet from the well bore. 3D simulator confirms this conclusion. 3D seismic attributes are collaborative. Downdip oil leg is then a possibility. Rock quality is excellent and therefore delivers a substantial theoretical flow rate. 21

23 BLUFF CONCLUSIONS Using a $50 per bbl oil price NPV 10 is $8.3 million. 3D simulator used to develop a type curve for wells in the oil leg. EUR is 550,000 bbls. IP rate of 500 BOPD. Wells are conventional vertical wells. Well cost around $3 million. The Bluff prospect on a 40 acre spacing has 20 locations. The Hawk Springs project has 18 additional prospects 22

24 NEW PROJECT Located in the Rockies area. Samson has acquired an option over 8,000 acres. Adjacent to proved productive area. Commercial arrangement to access surface being negotiated with an existing non hydrocarbon mineral leasee. Negotiations proceeding well with the agreement into a third draft. 23

25 NEW PROJECT Productivity of the area proven. Recoveries are variable and range between 300,000 and in excess of a 1 million barrels. Variance is due to structural position and the presence of natural factures. Quality 3D seismic is a key factor in well orientation and fracture detection. 24

26 NEW PROJECT Well economics are robust. Assuming $50 per bbl realized oil price and a well cost of $7.6 million. Larger EUR well has a NPV 10 of $30 million and an IRR of 284% Smaller EUR well has a NPV 10 of $0.6 million and an IRR of 14%. 25

27 NEW PROJECT TIMETABLE Complete commercial arrangements, by mid year Acquire 3D seismic in the winter of Drill two wells mid year

28 2014/15 RESERVES PDP PDNP PUD PROVED MBOE NPV 10 $ million MBOE NPV 10 $ million MBOE NPV 10 $ million MBOE NPV 10 $ million Mar $ $ $8.92 1,455 $39.19 June 14 1,032 $ $ $9.95 1,753 $49.70 Dec $ $ $3.83 1,774 $39.44 Feb 15 1,346 $ $ ,841 $37.45 NYMEX pricing 27

29 LIQUIDITY US$ 000 Cash $2.665 March quarter product sales $2.000 Proceeds from hedging $1.453 TOTAL $6.118 Facility Rate Term Base Drawn 3.25% + LIBOR 3 years $19 million $19 million As at March 31 st 2014, internal, not audited 28

30 $ MILLIONS LIQUIDITY CASH MARCH QTR SALES HEDGES TOTAL 29

31 PRODUCTION ESTIMATE Forward estimate is based on: Base case assumes no further drilling in North Stockyard and produces existing well inventory. Rainbow middle Bakken wells are drilled from January The new project is farmed down to a 25% working interest and comes on stream in June 2016 following the acquisition of a 3D grid. No production attributed to the Bluff project. 30

32 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 BOPD PRODUCTION ESTIMATE base plus rainbow plus new at 25% 31

33 SUMMARY Primary infill development completed in North Stockyard. Rainbow Bakken drilling can recommence due to oil service cost reduction once oil price is stabilized at levels above $50 (WTI). Focus is on two projects that respond well to a $50 per bbl price point. Conventional acreage in the DJ attractive because of lower development cost, key risk elements known, oil leg looks probable. Samson well down the track of acquiring a very attractive conventional play.