In late 2008 Samson participated in the drilling of the Leonard #1-23H, its first test of the Bakken Formation in the Williston Basin in North Dakota. This well was drilled with a 5,000 foot lateral in this objective and has produced 29,000 barrels during the intervening period. The production rate has been lower than expected at around 100 BOPD.

An evaluation of the production performance and the previous fracture stimulation of the well revealed that the proppant used in the initial stimulation had insufficient strength to withstand the closure pressure and therefore the production performance had been compromised as a result. In addition during the initial stimulation the deepest half of the horizontal section was plugged with proppant in the early part of the flow back and therefore the stimulation fluid was inadvertently left in the reservoir for an extended period of time (45 days) which has been known to cause formation damage.

In an effort to rectify these problems the well has been re-stimulated and a treatment placed 98,000 pounds of high strength proppant using 18,000 barrels of stimulation fluid. This operation was successfully carried out Wednesday, October 21, and the flow back of this treatment is currently under way.

A successful conclusion to this treatment would enable the balance of Samson's acreage to be developed with 5 additional horizontal wells. The Bakken Formation has gained significant prominence after the United States Geological Survey (USGS) published an estimate in April 2008 that the unit could recover between 3.0 and 4.3 billion barrels of oil. The USGS has determined that the Bakken Formation represents a "continuous" oil accumulation and that advances in completion technology has meant that its estimate of the potential has increased 25 times since its 1995 study.

Samson has a 10% working interest in this well, however has maintained a 34.5% equity interest in the Bakken Formation in the balance of the 6,400 acreage block.

Tags: Samson Oil & Gas Limited