Samson Oil & Gas to re-enter Niobrara formation

DENVER –Samson Oil & Gas Ltd. (NYSE AMEX: SSN) is looking to re-enter the Niobrara shale formation in the Denver-Julesburg Basin, Wyoming to determine its productive capacity.

Samson holds roughly 40,800 net acres in Goshen County in southeastern Wyoming, where it has been pursuing the development of the Upper Cretaceous Niobrara Formation as an oil productive horizon. The evaluation of this acreage began in 2006, when the London Flats well was drilled as a horizontal completion. The well was not economically successful, but a recent review of the engineering of the well by Samson indicated that, as drilled, the well design had several shortcomings.

In light of the development of horizontal completions in the Bakken Formation, the company is hoping for similar success when it re-enters the well to determine its productive capacity.

Activities by other companies, approximately 15 miles to the south on the border of Platte and Goshen Counties have raised the profile of the prospective formation. Evidence of increased competitor activity and successful completions are abundant, which Samson believes are largely responsible for the keen interest that the industry is showing in its Niobrara Formation project.

Over the last several months, Samson has been engaged in discussions with various industry partners with a view toward sharing a portion of the exploration expense of the project via a farmout. These discussions have resulted in an offer to purchase a portion of Samson’s interest at a substantial premium over Samson's original purchase price for the acreage. While Samson has not made any final determination to sell a portion of its interest at this time, such a sale could provide additional working capital that would then be available to drill several new wells, to pay down debt or for other purposes. It is, however, Samson’s intent to retain a significant interest in the project in any event.

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