Macquarie Bank Becomes Substantial Shareholder in Samson O&G

Samson Oil & Gas Limited has finalized an arrangement with Macquarie Bank Limited (MBL) for it to acquire a substantial shareholding in the Company in exchange for cancelling the previously issued options associated with a debt facility entered into in May 2006.

The existing debt facility had two tranches:

Tranche A has an outstanding amount of US$11 million, and the options associated with this tranche have an exercise price of A$0.61 that was set in May 2006 based on 1.3 times the prevailing the volume weighted average price (VWAP) on the Australian Securities Exchange (which are currently trading at A$0.027).

Tranche B has an outstanding balance of US$6.06 million, with options priced at 1.2 times the VWAP for the first quarter of 2009. Whilst that quarter's trading has yet to be completed, it is anticipated that this issue would represent approximately 264 million options available to be exercised until May 2011. In the event that the options were exercised, then the facility amount would be reduced to the extent of the subscription price of the options exercised.

It was recognized by both MBL and SSN that this volume of options was a commercially undesirable situation, as it would have represented approximately 55% of the issued shares of the company after exercise. Therefore, these options are to be surrendered in exchange for the issue, at no additional cost and without reduction of the facility, of 36.8 million shares, representing approximately 15% of the issued capital of Samson after the transaction.

These shares will be issued in three installments. The first of 29.3 million shares is scheduled for no later than March 16, 2009. The second of 2 million shares is scheduled for no later than July 1, 2009; and the final installment of 5.5 million shares is scheduled for no later than Nov. 30, 2009.

The shares will rank pari passu in all respects with SSN's existing ordinary fully paid shares. SSN will seek shareholder approval to issue the third installment of shares.

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