Samson Oil and Gas (ASX: SSN; NYSE MKT: SSN) has entered into a seismic and drilling agreement with Momentus Energy Corp., a Canadian exploration and development company located in Calgary, Alberta. Momentus has committed to the acquisition of 20 square miles of 3D seismic data that will cover a significant portion of 30,000 net acres of leases that Samson currently holds, and has the right to explore and develop, on the Fort Peck Indian Reservation.
The 3D seismic is planned in the eastern half of the acreage block, where it will be utilized to image both the middle Bakken and potential conventional targets in the Red River and Madison formations.
Within 45 days following the receipt of the final processed 3D seismic data, Momentus will provide a full presentation of its interpretation to Samson. At that time, Momentus will also make its election known to Samson for its commitment to drill a horizontal Bakken well at a location of its choice on the Roosevelt Block.
Upon Momentus having drilled the horizontal Bakken test well, Momentus shall have earned 50% of Samson’s interest in the test well and 50% of Samson’s interest in the Roosevelt Block. Samson will be fully carried by Momentus in this horizontal Bakken test well while retaining a net 33.33% working interest.
Momentus has the option to re-enter and work over both the Gretel II and Australia II wells. In doing so, Momentus would earn a 50% equity in the particular well (or wells) and the 640-acre spacing unit associated with each well.
The firm program, consisting of the 3D seismic and the Bakken well, is valued at approximately $10 million. The farm-in will advance the geologic understanding of the project area and allow application of fracture stimulation techniques. Samson will still have a significant interest in the project with a net 15,000 acres after Momentus has completed their firm program.