Perth, Australia-based Samson Oil & Gas
Get the basics right
Production for the first quarter of this year fell substantially compared to the previous quarter. Natural gas production plunged almost 63%, while oil production fell by 32% after the company decided to put its Greater Green River Basin properties in Wyoming on the block for some much-needed cash. The consequential drop in revenues will definitely affect this year's development plans.
Samson had $73 million in cash at the end of March. While this is enough to pay off debts (around $9.5 million paid off by May), I doubt if that kind of cash is sufficient to see the development program all the way through.
Promising on paper
The drilling plan for this year includes three more developmental wells in the Bakken's North Stockyard Project in Williams County. In addition, Samson is looking to drill an appraisal well to evaluate production in the Three Forks formation.
The major development program will be with the Hawk Spring project in the Niobrara formation. Under a joint venture with Halliburton
As of now, I would not want to compare Samson with seasoned small-cap players in the Bakken like Kodiak Oil & Gas
Foolish bottom line
The next 12 months will not be easy for Samson. Investors should carefully look out for further developments before considering making this stock a part of their portfolio. Resources in the showcase do not really prove much.
Fool contributor Isac Simon does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.