Samson, Devon to pursue Baxter shale gas

Samson Oil & Gas and Devon Energy Production signed an exploration agreement covering Samson's 6,400-acre holding in the western Vermillion basin in Sweetwater County, Wyo.

By OGJ editors
HOUSTON, May 2 -- Samson Oil & Gas Ltd., Perth, and Devon Energy Production Co., Oklahoma City, signed an exploration agreement covering Samson's 6,400-acre holding in the western Vermillion basin in Sweetwater County, Wyo.

The agreement provides that 3D seismic will be shot in mid-2008 to define a Devon-operated exploratory program for gas in Cretaceous Baxter shale.

Shooting 3D seismic is a needed first step so natural fracture systems can be identified and evaluated for drilling. This appears to be one of several technical keys to the successful flow rates seen to date in the Vermillion region, Samson said.

Samson will hold 50% interest in the block unless it permits a third party to complete the second farm-in well in the Greens Canyon area and earn an 18% equity stake in Samson's leases. In that case, Samson would retain a 32% equity interest.

This area has a 3,500-ft section of Baxter shale which when drilled in the 1970s yielded a large flow of gas without stimulation. Since then much drilling has taken place 40 miles east of Samson's acreage, where other companies have established flows of up to 9 MMcfd from the shale.

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