Samson Exploring Strategic Alternatives Due to Low Oil Prices, Debt

Samson Resources has engaged advisors to help evaluate strategic alternatives, a company spokesperson told Rigzone Wednesday.

The company has not yet defined its plans, the spokesperson said in response to reports that Samson may file for Chapter 11 bankruptcy.

Tulsa-based Samson reported in a March 31 filing with the U.S. Securities and Exchange Commission that it has hired advisors to facilitate debt restructuring. In March, the company reduced its workforce by 30 percent and implemented other cost cutting initiatives. Samson expects to complete in four weeks an evaluation of its field operations personnel, which will result in further reductions.

The company has amended its credit facility to preserve near-term liquidity, which will create a runway from which to implement a comprehensive restructuring, the company said in a presentation.

Samson recently divested its Arkoma assets for $48 million. It also marketed its Bakken, Wamsutter, San Juan, Permian Minerals and non-core MidCon assets, but did not receive acceptable bids.

The company plans to restart drilling in its core assets in the Bakken/Three Forks, Taylor, Cotton Valley, and gas option in the Haynesville play once oil prices and the cost environment improves, Samson said. Going forward, the company will take a calculated approach to testing its Ft. Union, Granite Wash and Mowry assets.

Samson’s objectives in 2015 are to retain key technical and professional talent, reduce costs further and continue to upgrade facilities, as well as evaluate assets and potentially sell non-core assets. Samson also aims to achieve permanent changes to its capital structure by rationalizing debt load to match asset base and current performance.

In 2014, the company had a net debt of $3.8 billion and a net debt of $3.5 billion in 2013. It had negative cash flow of $325 million last year and $76 million in 2013.

Samson had a total production of 530 million cubic feet equivalent per day (MMcfe/d) in 2014, and estimates production of 435 to 460 MMcfe/d in 2015.