Samson Encouraged by Recently Completed Bakken Well

Samson Oil & Gas has advised that fracture stimulation of the Leonard-1-23H was completed as scheduled, pumping eight multi-staged fracs over the entire 5,600 foot horizontal section that had previously been drilled and cased within the Bakken Formation.

The flow back of the well was then conducted over several days and at the end of that period when about 25% of the stimulation fluid had been recovered, the well was flowing around 860 BOPD with 860 BWPD. The well was then turned to the production system. Acute weather conditions have frozen surface equipment which has disrupted the well performance and therefore it is difficult to determine the definitive flow rate that the well will sustain. However the initial oil rate is extremely encouraging and is expected to improve as the well unloads the balance of the stimulation fluids.

The Bakken Formation gained significant prominence after the United States Geological Survey (USGS) published an estimate in April this year that the unit could recover between 3.0 and 4.3 billion barrels of oil. The USGS has determined that the Bakken Formation represents a "continuous" oil accumulation and that advances in completion technology have increased by 25 times the estimated recovery potential since the 1995 USGS study.

Whilst the original objective of this well was the Bluell Formation, Samson elected to reduce its working interest to 10% in the deepening to the Bakken Formation in this well, whilst maintaining its 37.5% equity interest in the Bakken Formation for the balance of the acreage. Samson has therefore been able to achieve an evaluation of the Bakken Formation in this well bore at a modest exposure whilst retaining significant equity in the balance of the acreage, the development of which is now likely given the initial results of the well.