Samson O&G has agreed to sell its gas assets in the Jonah and Lookout Wash Fields in the greater Green River Basin, Wyoming for $6.3 million to a group of private buyers. The transaction is currently expected to close on or before March 30th, 2011. When closed, the sale will have an effective date of January 1, 2011.
The sale of these gas properties will cause the Company to recognize a tax loss that will offset some of the income tax liability it previously incurred by the sale of acreage in Goshen County, Wyoming completed in November 2010. The tax benefit is presently expected to be approximately $8 million, though the final amount will not be determined until the tax return for the year ended June 30, 2011 is completed and filed.
The sale of these gas assets is consistent with the business strategy Samson announced in October 2010, allowing Samson to focus on developing its two oil plays, the Bakken Formation in North Dakota and the Niobrara Formation in Wyoming. That strategy also calls for the Company to become debt-free in May 2011 when its debt facility with Macquarie Bank, bearing a current balance of $9.7 million, matures.
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