A couple of months back I expressed doubts over whether Samson Oil & Gas (AMEX: SSN) would be able to fund its future development program. However, things now seem to have started looking up following the company's drilling update in the Niobrara shale.

Successful first attempt
Samson has finished drilling its Defender US33 No. 2-29H well, and it's good news so far. Core analysis from the vertical section of the drilled hole indicates oil-saturated brittle carbonate sections. Since this is the first drilling for the company's Hawk Springs project in Niobrara, this should sound encouraging to shareholders. The well's 15-stage fracturing is expected to start by the end of October.

Following the sale of its Greater Green River Basin properties in Wyoming to Chesapeake Energy (NYSE: CHK), Samson paid off all debt and beefed up its cash balances. With around $58 million left in the bank, Samson looks comfortably placed to meet its expected capital expenditures of $25 million for fiscal 2012.

Encouraging growth
Running a company with zero debt is not unique, though. Contango Oil & Gas (AMEX: MCF) has done a fantastic job so far. According to Ken Peak, Contango's vastly experienced CEO, only low-cost producers survive and prosper in a commodity business. And this makes a lot of sense. It hardly does any good for small-cap exploration and production companies to leverage beyond comfortable limits. Debts most certainly sit heavy on managements' shoulders given the substantial volatility in energy prices that we see today.

The just-finished fiscal year saw Samson's revenue grow 106% to $5.9 million, thanks to a combination of increased oil production and increased price realizations. This percentage growth -- despite the sale of properties -- should look impressive. The company seems to be making amends through it Bakken properties, where production is under way. With the North Dakota properties seeing completion of three development wells and awaiting fracture stimulation of another, things should look up from here.

A bargain Bakken stock?
It's also interesting to note that Samson's current price-to-book value is 2.77 -- well below the 12-month average of 4.16. With successful fellow Bakken operators Brigham Exploration (Nasdaq: BEXP) trading nearly four and a half times its book value and Kodiak Oil & Gas (NYSE: KOG) trading over three times, Samson's stock should pique the interest of Foolish investors.

Foolish bottom line
While it's looking good so far for Samson, actual production should be visible only from the following quarter. Overall, management here seems to be on the right track. We at The Motley Fool will help you stay up to speed on the top news and analysis on Samson. You can start by adding it to your watchlist.