Samson Resources Divests Powder River Basin Assets, Plans to Wind Down
Tulsa, Oklahoma-based Samson Resources II LLC has entered into a definitive agreement with an undisclosed buyer to divest all of its Powder River basin assets in Wyoming, for a total cash consideration of US$215 million.
The company intends to use the proceeds from the sale to pay off approximately US$13 million in debt under its existing reserve-based credit facility, and to make a cash distribution to its unitholders. Following the closing, it will begin the process of winding down its affairs and moving toward final dissolution.
Upon completion of this transaction, Samson’s remaining oil & gas assets will consist of approximately 24,000 net leasehold acres, 23,000 net mineral acres, and 40 non-operated wells located in East Texas, Oklahoma and Louisiana. The company plans to divest these assets in early 2021.
The Powder River basin assets cover approximately 132,000 net acres, spread across the Johnson, Campbell and Converse counties in Wyoming. The assets primarily target the Parkman, Shannon and Turner/Frontier formations, and also include potential for development in the Niobrara and Mowry shales. The acreage is contiguous, facilitating the development of longer-lateral wells with a higher rate of return. Production from the assets during 2020 averaged approximately 8,500 barrels of oil equivalent per day (boe/d), of which 75% was oil.
“When this sale closes, it will conclude the four-year process of monetizing Samson’s assets and delivering a strong cash return to our equity owners following our emergence from bankruptcy in March 2017,” said Joseph A. Mills, Samson’s president & CEO.
Privately-held Samson is focused on the development of oil and natural gas assets in Wyoming, East Texas, Oklahoma and Louisiana. The company is the successor to Samson Resources Corp., which filed for Chapter 11 bankruptcy in 2015.
Jefferies is serving as exclusive financial advisor to Samson and led the marketing process for the Powder River basin assets.
The transaction is subject to customary closing conditions, and is expected to be completed by March 4th, 2021.