Samson Oil & Gas: Cost-Efficient Williston Horizontals on the Drawing Board

Samson Oil & Gas Limited (ticker: SSN), is an Australia based company with operations based in the United States. The company produced a total of 64,632 barrels of oil and 58,209 Mcf of gas during Q1, 2017.

Williston basin

With primary plays in the Williston basin, Samson focuses on its assets in the Madison Group reservoirs. The Madison Group reservoirs are located in Williams and McKenzie Counties in North Dakota and in Roosevelt County, in Montana.

Samson’s recent extension of debt maturity allows Samson to now take the opportunity to develop the considerable undeveloped value associated with its Foreman Butte project.

As of March, 2017, Samson held 51,305 net acres in the Foreman Butte portion of the Williston, and a total of 54,895 across all of its Williston basin assets. Samson has an average of 87% working interest in the Foreman Butte asset.

Since taking over operatorship of the project in June 2016, Samson has quadrupled the developed production rate and has finalized an engineering design to drill the infill development wells, particularly in the Home Run Field.

Capital-efficient drilling design bumps economic viability of Foreman Butte

In further establishing production in its Williston assets, Samson is planning two new horizontal wells, both of which are going to be drilled out of the existing Maris 1–16H wellbore.

Samson’s March 2017 reserve estimated $46.6 million of Proved Undeveloped reserve value, which despite the relatively low oil price remains economically attractive, due to the planned drilling design, which drills the infill wells from the existing production wells bores.

This capital efficient design ($375,000 per lateral) can be achieved as the existing wells are cased to the producing reservoir and the balance of the horizontal well is uncased (an “open-hole” completion).

Each of selected existing wells will see two new laterals drilled to access the undeveloped reserve.

Samson’s technical studies, which have been used to develop an expected production curve from these new laterals have included a rigorous 3D numerical simulation and a field wide fluid level study to establish a current reservoir pressure. These studies recognize that the historical production has lowered the reservoir pressure, however the studies have indicated that the current reservoir pressure is sufficient to sustain an economical production rate from the infill wells.

Samson has permit approvals for two laterals from the Maris well and has four permit applications associated with the Hodges and Gonzales wells. In June the company said it was sourcing a drilling rig and expected that the first two of the development laterals will be drilled later this summer.

The company is looking to build production by returning previously shut-in wells to production. Samson says it has also identified potential pay zones that are behind pipe in several wells, which may be candidates for recompletion in the future.

Exploration

One of Samson’s prime exploration targets is in the Paradox basin, where it intends to target the Cane Creek play. Samson has the option to lease approximately 8,080 net acres targeting the Cane Creek play until November, 2017. Any exploration is not expected to begin until 2018.

As of the end of Q1, 2017 Samson was looking to perforate and flow test the Jurassic Canyon Spring formation in its Hawk Springs project — located in the Denver-Julesberg basin. It noted that, should the test be unsuccessful, it will then perforate and flow test the Cretaceous Dakota formation. The recompletion is expected to take place in Q2, 2017.

Sale of New Mexico assets

Samson sold its New Mexico assets in the State GC field for $1.2 million to a private energy company on May 30th, 2017.

Samson Oil & Gas Limited is presenting at EnerCom’s The Oil & Gas Conference® 22

Samson will be a presenting company at the upcoming EnerCom conference in Denver, Colorado — The Oil & Gas Conference® 22.

The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors. The conference will be at the Denver Downtown Westin Hotel, August 13–17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.

Samson Oil & Gas: Cost-Efficient Williston Horizontals on the Drawing Board

Originally published at Oil & Gas 360.

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