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Samson Oil & Gas Ltd. (SSN): Exploring the West for Oil and Gas Treasure

Samson Oil & Gas (SSN) is a developer, explorer and producer of oil and natural gas with projects currently operating in Oklahoma, Texas and Wyoming. The company’s Sabertooth Well project in Brazoria County, Texas is worth roughly $13 million to the company, but could eventually be worth exponentially more. Samson has also partnered with energy giant Devon Energy Corp. to form an exploratory unit in Wyoming’s Baxter Shale to find natural gas. Samson also has projects in Colorado and North Dakota.

Samson shares are actually America Depositary Receipts (ADRs) for an Australia-based holding company. Each ADR represents 20 Australian shares. Samson’s operations are based entirely in the United States and directed from Colorado. The company has about $1 million in monthly revenue with a development budget of about $7 million annually. Recently, Samson officials said they expect the company to be able to increase production to 200 barrels of crude oil per day, up from the current level of 80 barrels per day. Even with the recent plunge in oil prices, Samson’s cost basis is around $20 a barrel, so the company expects to be profitable.

As for natural gas, the company has 20 base years of gas equivalent valued at $50 million. The company was formerly known as Samson Exploration NL and changed its name to Samson Oil and Gas NL in 2005. Later, the name of the company was changed to Samson Oil & Gas Limited in 2006. No Wall Street analysts follow the company as of yet, but several institutions own shares, including UBS, Merrill Lynch and Madison Street Partners.

Shares of Samson closed Monday at $1.20 and have traded between $1.01 and $19.90 over the past 52 weeks. Due to the volatility and sharp rises and falls in the shares, Samson officials asked the American Stock Exchange to investigate naked short selling of Samson shares earlier this year. Results of the investigation are still pending. The company has a market capitalization of $12.55 million.

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