Samson Oil & Gas has signed a three-party participation deal with Halliburton Energy and its existing private company partner for the evaluation and development of the Niobrara Formation and other conventional targets in the Denver-Julesburg Basin for part of Samson's Hawk Springs project in Goshen County, Wyoming.
Under the deal, Samson and its partner will be free carried through the drilling and completion of two wells with approximate 4,500′ laterals and will be reimbursed for a portion of the cost of the North Platte 3-D seismic survey.
Halliburton will acquire 25% equity in the farm-in area (a net 2,819 acres).
The transaction has been structured such that the acquisition cost can be valued at a rate of $3,275 per acre.
Halliburton retains the option to not drill the second farm-in well; in which event its 25% equity would be reduced to half the project area.
The Halliburton farm-in area consists of a gross area of 11,277 acres, including 6,589 net acres currently held by Samson.
Assuming completion of both farm-in wells, Samson’s acreage inside the Halliburton farm-in area will be reduced to 4,942 net acres, and Samson’s total holdings in the Hawk Springs project will be reduced to 14,883 net acres, versus the approximately 16,530 net acres currently held.
Following the completion of the earn in program, Samson will retain a weighted average royalty of 3% within the farm in area.
The company will remain operator of the farmed-in acreage and Halliburton will provide project management services, as well as regular oil field services, in support of the drilling, completion and fracture stimulation of the wells.
The agreement also includes a provision requiring that the service rates charged by Halliburton are market based.