Samson told the ASX this acquisition, which was made during the recent Wyoming Oil and Gas Commissioner’s lease sale, compliments the JV’s existing 135,000 acres – taking its total holding to 144,100 acres.
The JV, in which Samson and Mountain Energy each hold a 50% stake, was established last November, after Samson agreed to pay Mountain Energy almost $US500,000 ($A675,460) for the acquisition via a share placement of 1.66 million ordinary shares at US0.30c each.
The newly acquired leases, in the southwestern quadrant of the project area, provide infill coverage to existing leases, Samson said.
Samson said initial coal bed methane (CBM) drilling in the area returned disappointing results, and the JV will therefore concentrate on the original primary targets in the project area – the Niobrara and Codell formations.
The Niobrara Formation is a fractured oil play, in which more than 10 million recoverable barrels of oil were discovered in the Silo Field, 13km south of the Hawk Springs area.
The Silo reservoir was discovered in 1982 but Samson said it was not until 10 years later, when horizontal drilling was applied to the field, that significant recoveries where made.
The Hawk Springs exploration program will involve two vertical wells drilling into identified areas of elevated resistivity in the Niobrara, Codell and the Muddy Sandstones, so that all prospective levels can be evaluated, Samson said.
The wells would then be plugged back and a horizontal well drilled, it said.
Based on the assumption that the two observed resistivity anomalies in Niobrara are identical to those in Silo, Niobrara is estimated to contain 20 million recoverable barrels of oil, or 10 million barrels net to Samson.
In addition, the JV will examine the gas prospectivity of the Codell Formation, which is also productive in the Denver Julesburg Basin. More than 30 million barrels of oil and 320 billion cubic feet of gas have been recovered from Cordell in the Wattenberg Field.
Samson said the new Codell Sandstone Wet Gas project field was stratigraphically trapped.
“Similar geologic circumstances are present within the southwestern part of the project area, where an isolated thick sequence of Cordell Sandstone has been mapped using existing well control and therefore has the potential to generate a trap,” Samson managing director Terry Barr said.
“Whilst vintage exploration wells have penetrated this sequence and returned significant oil and gas shows, no commercial flow was established.
“However, it has been the case that the early drilling and completion of the Wattenberg Field in the Codell was not successful and it was only in the very late 1990s that fracture stimulation technology enabled this rock to be exploited commercially.”
Samson said this trap has the potential to recover between 95 and 140 million barrels of oil equivalent.
Samson, which will act as project operator, is currently in discussions to secure a drill rig. It said planning for the first well is advanced and a location selected, with drilling of the first Niobrara well expected in the first half of this year.