Denver-based Samson Oil and Gas USA, Inc. said Oct. 18 that while it is still is discussions with Eagle Energy Partners I LLC, it is looking for an alternative buyer for the sale of nearly all of its Foreman Butte project in the Williston Basin in North Dakota and Montana.
Samson, which has an 87% operated average working interest in the project, previously entered into a purchase and sale agreement, or PSA, with Eagle Energy for $40 million. The transaction would include Samson holding onto a non-operated 15% working interest in the Home Run field, which contains the bulk of the identified upside of the project.
In September, Eagle Energy asked for an extension to complete the deal on Oct. 15. However, it did not close as expected and now the PSA with Eagle Energy has expired.
Samson said the recent increase in the price of oil has raised the reserve value of the asset. "The company is therefore confident that interest in the asset will remain high."
Samson said previously that the proposed deal with Eagle Energy would allow Samson to retire all of its debt and meet all other liabilities and should leave the company with a cash balance of approximately US$7 million.
In February, a deal to sell its stake in the Foreman Butte project to Denver-based Firehawk Oil & Gas LLC for more than $41 million was terminated because that company was not able to complete its financing.
In light of the cancellation of that sale, Samson said it would proceed with a previously proposed $30 million refinancing. The new debt facility would be used to repay its existing lender in full and would also provide sufficient working capital for the recommencement of its extensive development drilling program.
Samson said it averaged approximately 800 barrels of oil per day from its operated wells in the Foreman Butte project this quarter. The production was reduced by 140 boe/d due to capital constraints leading to a decrease in well workovers.
Samson Oil and Gas USA is a wholly owned subsidiary of Australia's Samson Oil and Gas Ltd.