Samson said that its Goshen County holdings were acquired several years ago reflecting its view that the Niobrara Formation represented an oil play that can be developed using horizontal drilling techniques.
The company has been seeking an industry partner for the Goshen County Project. Its board of directors recognized that full development of the project will require more capital than was then available to the company so that a partial sale of its holdings will be prudent to realize the maximum value from the project.
In order to establish the market value of this acreage, Samson invited industry participants to review the acreage and submit a competitive bid.
The agreement calls for the sale of Samson’s entire working interest in the southern portion of its holdings in Goshen County, though the company will retain an average 4.8% royalty interest in the leases that are sold.
Samson will also retain all of its remaining interests located in the northern part of the existing project, or approximately 16,300 net acres. The company presently intends to drill and develop this retained acreage without further material dilution of its holdings, although future developments can alter those plans.
The closing of the transaction, which is tentatively scheduled for July 26, is conditional on satisfactory conclusion of the buyer’s due diligence, Samson said.
