8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1) 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 31, 2016

Samson Oil & Gas Limited

(Exact name of registrant as specified in its charter) 

Australia	001-33578	N/A
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification Number)
Level 16, AMP Building, 140 St Georges Terrace Perth, Western Australia 6000
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 011 61 8 9220 9830

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On March 31, 2016, Samson Oil and Gas USA, Inc. (“Samson USA”), a subsidiary of Samson Oil & Gas Limited (the “Company”), completed the acquisition of certain assets from Oasis Petroleum North America LLC (the “Seller”) pursuant to a Purchase and Sale Agreement dated December 31, 2015, as amended by the First Amendment to Purchase and Sale Agreement dated March 31, 2016 (the “Purchase Agreement”). The entry into the Purchase Agreement was disclosed in a Form 8-K filed by the Company on January 7, 2016, and the closing of the acquisition was disclosed in a Form 8-K filed on filed on April 6, 2016 (the “Prior Form 8-K”).

This amendment amends and supplements Item 9.01 of the Prior Form 8-K to provide the audited statements of revenue and direct operating expenses and unaudited pro forma data relating to the acquired properties that are required to be filed by this amendment.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
10.1	First Amendment to Purchase and Sale Agreement dated March 31, 2016 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed April 6, 2016)
10.2	Secured Promissory Note dated March 31, 2016 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed April 6, 2016)
10.3	Third Amendment to Credit Agreement dated March 31, 2016 (filed as Exhibit 10.3 to the Current Report on Form 8-K filed April 6, 2016)
23.1	Consent of Hein & Associates LLP
23.2	Consent of Netherland Sewell & Associates, Inc.
99.1	Audited statements of revenues and direct operating expenses for the twelve months ended June 30, 2015 and for the nine months ended March 31, 2016
99.2	Unaudited Combined Pro Forma Financial Data for the twelve months ended June 30, 2015 and nine months ended March 31, 2016
99.3	Report of Netherland Sewell & Associates, Inc. dated February 11, 2016
99.4	Price Sensitivity Report of Netherland Sewell & Associates, Inc. dated June 9, 2016
99.5	Press Release dated April 3, 2016 (filed as Exhibit 99.1 to the Current Report on Form 8-K filed April 6, 2016)

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 15, 2016
	Samson Oil & Gas Limited
	By:	/s/ Robyn Lamont
		Robyn Lamont
		Chief Financial Officer

3

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements on Form S-3 (No. 333-207306) and Form S-8 (No. 333-173647) of Samson Oil & Gas Limited of our report dated July 15, 2016, relating to our audits of the Statements of Revenues and Direct Operating Expenses of properties acquired from Oasis Petroleum, Inc. by Samson Oil & Gas Limited for the nine months ended March 31, 2016 and the year ended June 30, 2015, included in this Current Report on Form 8-K/A.

/s/ Hein & Associates LLP

Denver, Colorado

July 15, 2016

EX-23.2

Exhibit 23.2

 

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

We hereby consent to the reference to (i) our Reserve Report dated February 11, 2016 (the "Reserve Report"), relating to the proved reserves and future revenue as of October 1, 2015, of certain oil and gas properties acquired by Samson Oil & Gas Limited from Oasis Petroleum North America LLC located in Montana and North Dakota, and (ii) our Price Sensitivity Letter dated June 14, 2016, which supplements the Reserve Report with as of date and price sensitivity as of March 31, 2016, and we further consent to the use of the name of Netherland, Sewell & Associates, Inc. in the Form 8-K/A dated June 15, 2016, and in other reports filed with the Securities and Exchange Commission by Samson Oil and Gas Limited. We also consent to the incorporation by reference of information from our reports in Samson Oil & Gas Limited’s Registration Statements on Form S-3 (No. 333-207306) and Form S-8 (No. 333-173647) and related prospectuses.

NETHERLAND, SEWELL & ASSOCIATES, INC.

By: /s/ G. Lance Binder

G. Lance Binder, P.E.

Executive Vice President

Dallas, Texas

June 15, 2016

Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.

EX-99.1

Exhibit 99.1

Foreman Butte Acquisition Properties

Table of Contents

Page

Report of Independent Registered Public Accounting Firm	2
Statements of Revenues and Direct Operating Expenses of the Foreman Butte Acquisition	3
Properties for the twelve months ended June 30, 2015 and the nine months ended March 31, 2016
Notes to the Statements of Revenues and Direct Operating Expenses of the Foreman Butte	4
Acquisition Properties

1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Samson Oil & Gas Limited

We have audited the accompanying statements of revenues and direct operating expenses of properties acquired from Oasis Petroleum, Inc. by Samson Oil & Gas Limited and subsidiaries (the “Oasis Properties”) for the nine months ended March 31, 2016 and for the year ended June 30, 2015. These financial statements are the responsibility of Samson Oil & Gas Limited’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and direct operating expenses of the Oasis Properties described in Note 1 for the nine months ended March 31, 2016 and for the year ended June 30, 2015, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements are not intended to be a complete presentation of the financial position, results of operations, or cash flows of the Oasis Properties.

/s/ Hein & Associates LLP

Hein & Associates LLP

Denver, Colorado

June 15, 2016

2

2016 Foreman Butte Acquisition Properties

Statements of Revenue and Direct Operating Expenses

	Nine Months Ended March 31, 2016			Twelve Months Ended June 30, 2015
Oil and Gas Revenues
Oil	$	4,819,964		$	15,892,857
Natural gas and natural gas liquids		35,651			303,114
Salt water disposal revenue		46,129			481,986
Total		4,901,744			16,677,957
Direct Operating Costs
Production Cost
Lease operating		4,651,047			10,466,765
Production taxes		458,353			1,443,768
Workovers		367,690			1,647,644
Total		5,477,090			13,558,177
(Deficit)/Excess of revenues over direct operating expenses	$	(575,346	)	$	3,119,780

(See accompanying notes)

3

2016 Foreman Butte Acquisition Properties

Notes to Statement of Revenue and Direct Operating Expenses

Note 1 – Properties and Basis of Presentation

The accompanying statements represent the interests in the revenue and direct operating expense of the oil and natural gas producing properties and salt water disposal systems that were purchased by Samson Oil & Gas USA, Inc. for $16.1 million on March 31, 2016. The acquisition has an effective date of October 1, 2015 for certain financial benefits and obligations related to the purchased assets. The properties are referred to herein as the “2016 Foreman Butte Acquisition Properties” and are located in Richland, Roosevelt, Dawson, Valley and Sheridan counties in Montana and McKenzie, Bowman and Williams counties in North Dakota.

The statements of revenues and direct operating expenses have been derived from lease operating statements provided by Oasis Petroleum Inc., the seller of the assets, and prepared on the accrual basis of accounting. Revenues and direct operating expenses relate to the historical net revenue interests and net working interests acquired by Samson. Oil, natural gas and natural gas liquids revenues are recognized on the sales method when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred, and if collectability of the revenue is probable. Revenues are reported net of overriding and other royalties due to third parties. Direct operating expenses include lease operating expenses, production and ad valorem taxes, transportation and all other direct operating costs associated with these properties. Lease operating expenses also include the costs associated with operating the associated salt water disposal wells and gathering systems. Direct operating expenses do not include corporate overhead, interest expense and income taxes.

The statements of revenue and direct operating expenses are not indicative of the financial condition or results of operations of the 2016 Foreman Butte Acquisition Properties going forward due to the different cost structures employed by the previous operator and Samson. Certain costs not directly involved in revenue producing activities have also been omitted. During the periods presented, the 2016 Foreman Butte Acquisition Properties were not accounted for by Oasis Petroleum Inc. as a separate business unit. As such, certain costs, such as depreciation, depletion and amortization of oil and gas properties, accretion of asset retirement obligations, general and administrative expenses, interest expense and income taxes were not allocated to the 2016 Foreman Butte Acquisition Properties.

The preparation of statements of revenues and direct operating expenses in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on management’s best available knowledge of current and future events, actual results could differ materially from those estimates.

Note 2 – Omitted Financial Information

Historical financial statements reflecting financial position, results of operations and cash flows required by accounting principles generally accepted in the United States of America are not presented as such information was not available on a property by property basis or for the Foreman Butte Acquisition Properties as a whole, not is it practicable to obtain such information in these circumstances. Historically, no allocation of general and administrative, interest expense, corporate taxes, accretion of asset retirement obligations, and depreciation, depletion and amortization or oil and gas properties was made to the 2016 Foreman Butte Acquisition Properties, and the seller did not prepare separate financial statements or maintain separate accounts necessary to present financial statements with respect to the 2016 Foreman Butte Acquisition Properties. Accordingly, the statements of revenues and direct operating expenses are presented in lieu of the financial statements required under Rule 3-01 and Rule 3-02 of the Securities and Exchange Commissions’ Regulations S-X.

4

Note 3 – Supplemental oil and Gas Reserve Information (Unaudited)

Oil and Gas Reserve Information

The following tables summarize the net ownership interests in estimated quantities of proved developed producing, proved developed non producing and proved undeveloped oil and natural gas reserves of the 2016 Foreman Butte Acquisition Properties for the periods indicated, estimated by management and Samson’s external reserve engineers, Netherland & Sewell Associates Inc., and the related summary of changes in estimated quantities of net remaining proved reserves during the periods indicated. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, reserve estimates are expected to change as additional performance data becomes available.

	Oil (Bbl)			Natural Gas and Natural Gas Liquids (Mcf)			Total (BOE)
Balance at July 1, 2014		2,807,283			1,401,167			3,040,811
Extension and discoveries		-			-			-
Production		(269,228	)		(77,365	)		(282,122	)
Revisions to previous estimates		(97,873	)		(123,785	)		(118,504	)
Balance at June 30, 2015		2,440,182			1,200,017			2,640,185
Extension and discoveries		-			-			-
Production		(144,648	)		(24,980	)		(148,811	)
Revisions to previous estimates		4,044,488			4,142,474			4,734,900
Balance at March 31, 2016		6,340,022			5,317,511			7,226,274
As at March 31, 2016
Proved Developed Producing		1,951,265			933,809			2,106,900
Proved Developed Non Producing		1,080,219			2,067,726			1,424,840
Total Proved Developed		3,031,484			3,001,535			3,531,740
Proved Undeveloped		3,308,538			2,315,976			3,694,534
Total Proved		6,340,022			5,317,511			7,226,274
As at June 30, 2015
Proved Developed Producing		2,440,182			1,200,017			2,640,185
Proved Developed Non Producing		-			-			-
Proved Undeveloped		-			-			-
Total Proved		2,440,182			1,200,017			2,640,185

5

Barrel of Oil Equivalent (BOE) assumes a ratio of 6 MCF of natural gas per barrel of oil.

For the nine months ended March 31, 2016, revisions to previous estimates includes revisions to proved non producing (“PDNP”) wells and proved undeveloped (“PUD”) well locations. Revisions to PDNP locations added 1.4 million BOE to total proved reserves and revisions to PUD locations added 3.7 million BOE to proved reserves.

The seller of the 2016 Foreman Butte Acquisition Properties was a predominately Bakken producer in North Dakota and Montana. As such, when a non-Bakken well stopped producing for any reason – mechanical or otherwise – the seller would often not invest any time or capital to restart production. As there was no plan to recommence production associated with these shut in wells, no value was ascribed to them in previous reserve reports. Samson has reviewed the engineering associated with these wells and following a change in the estimated operating cost structure and a small workover program (the capital cost of which is included in the reserve valuation) these previously shut in wells are now expected to be put back into production and produce at economic levels and therefore have been included in the reserve report. A portion of the proved non producing wells have also been recognized in the reserve report following evidence provided to the reserve engineer that indicates that stimulating some of these wells with acid could provide an uplift in production. This uplift is also included in the revisions to previous estimates.

In addition to the proved non producing wells, Samson has also added 3.7 million BOE in PUD reserves in the revisions of previous estimates category. The decreasing costs to drill a well have meant that these wells, which are estimated to cost approximately $2.8 million to drill, represent economic value based on SEC prices as at March 31, 2016. The reserves detailed above include 12 proved undeveloped well locations. These wells will be financed through a combination of free cash flow and additional capital (either debt or equity) that Samson anticipates raising in the future. While Samson’s ability to raise additional capital cannot be guaranteed, management believes that its plans for future of development of PUDs are reasonable and achievable in the current economic environment.

Proved reserves are estimated quantities of oil and natural gas which geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e. prices and costs) existing at the time the estimate is made. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates are made.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves

The following tables set forth the computation of the standardized measure of discounted future net cash flows relating to proved oil and gas reserves and the changes in standardized measure of discounted future net cash flows for the 2016 Foreman Butte Acquisition Properties in accordance with ASC 932, Extractive Activities – Oil and Gas and based on oil and natural gas reserve and production volumes. Future cash inflows as of June 30, 2015 and March 31, 2016 were computed by applying average prices (calculated as the unweighted arithmetic average of the first-day-of-the-month oil and gas prices for each month within the twelve month periods ended June 30, 2015 and March 31, 2016) to estimate future production. Future production and development costs are computed by estimating the expenditures to be incurred in developing and producing the proved oil and natural gas reserves at period end, based on period-end costs and assuming the continuation of existing economic conditions. Prices changes based on inflation, federal regulatory changes, supply and demand are not considered. Estimated future production costs related to period-end reserves are based on period-end costs. Such costs include, but are not limited to, production taxes and direct operating costs. Inflation and other anticipatory costs are not considered until the actual change takes effect. In accordance with the ASC 932, a discount rate of 10% is applied to the annual future net cash flows.

The prices, calculated as described above, were $68.17 per barrel of oil and $3.390 per MMBTU of natural gas at June 30, 2015 and $42.77 per barrel of oil and $2.93 per MMBTU of natural gas at March 31, 2016. The prices were based on index prices, which have been adjusted for historical average location and quality differentials. Future cash inflows were reduced by estimated future development and production costs based on period-end costs resulting in net cash flow before tax. Due to the historic net operating losses recognized by Samson and the significant amount of intangible drilling costs to be incurred in these cash flows, estimated taxes have not been included in this forecast.

6

The Standardized Measure is not intended to be representative of the fair market value of the proved reserves. The calculations of revenues and costs do not necessarily represent the amounts to be received or expended. Accordingly, the estimates of future net cash flows from proved reserves and the present value thereof may not be materially correct when judged against actual subsequent results. Further, since prices and costs do not remain static, and no price or cost changes have been considered, and future production and development costs are estimates to be incurred in developing and producing the estimated proved oil and gas reserves, the results are not necessarily indicative of the fair market value of estimated proved reserves, and the results may not be comparable to estimates disclosed by other oil and gas producers.

	March 31, 2016			June 30, 2015
Future cash inflows	$	242,328,700		$	153,441,600
Future production costs		(113,065,600	)		(60,480,500	)
Future development costs		(36,207,900	)		-
Future income tax		-			-
Future net cash flows		93,055,200			92,961,100
10% annual discount for estimated timing of cash flows		(51,491,000	)		(44,475,800	)
Standardized measure of discounted future cash flows	$	41,564,200		$	48,485,300

Changes in the standardized measure are as follows: 

	March 31, 2016			June 30, 2015
Beginning of the period	$	48,485,300		$	87,333,200
Sales of oil and gas produced, net of production costs		-			(3,119,780	)
Net changes in prices and production costs		(34,406,977	)		(40,979,106	)
Extensions, discoveries and improved recoveries		-			-
Previously estimated development costs incurred during the period		-			-
Net changes in future development costs		(36,207,900	)		-
Revisions of previous quantity estimates		58,845,247			-
Accretion of discount		4,848,530			5,250,986
Net change in income tax		-			-
Changes in timing of estimated cashflow and others		-			-
End of period	$	41,564,200		$	48,485,300

7

EX-99.2

Exhibit 99.2

2016 Foreman Butte Acquisition Properties

Unaudited Combined Pro Forma Financial Data

The following combined pro forma financial information gives effect to the acquisition of the Foreman Butte Properties for consideration of $16.1 million. Our current credit facility with our lead banker was extended by $11.5 million to partially fund this acquisition. The balance of this facility is $30.5 million, which is fully drawn. Its currently due January 2017, however we are in discussions with the lender to extend the term of this facility. In addition, the seller of the assets provided a $4 million promissory note with a 10% interest rate due March 31, 2017. The remaining $0.6 million was paid in cash.

The combined pro forma statement of operations for the nine months ended March 31, 2016 is based on our unaudited statement of operations for the nine months ended March 31, 2016, and the audited Summary of Revenues and Direct Operating Expenses of the 2016 Foreman Butte Acquisition Properties for the nine months ended March 31, 2016 and gives effect to the transaction described above as if it occurred on July 1, 2014.

The combined pro forma statement of operations for the year ended June 30, 2015 is based on our audited statement of operations for the year ended June 30, 2015, and the audited summary of revenues and direct operating expenses of the Foreman Butte Acquisition Properties acquired by the Company for the year ended June 30, 2016 and gives effect to the transaction described above as if it occurred on July 1, 2014.

The unaudited combined pro forma statement of operations presented herein have been included as required by the rules of the SEC and are provided for comparative purposes only. These unaudited combined pro forma financial statements should be read in conjunction with our historical financial statements and related notes for the periods presented.

The unaudited combined pro forma statement of operations presented herein are based upon assumptions and include adjustments as explained in the notes to the unaudited combined pro forma financial statements. The actual recording of the transactions could differ. The unaudited combined pro forma statement of operations presented herein are not necessarily indicative of the financial results that would have occurred had the transactions described above occurred on the dates indicated and should not be viewed as indicative of operations in the future. However, management believes that the assumptions used provide a reasonable basis for presenting the significant effects of the transactions discussed above and that the pro forma adjustments give appropriate effect to those assumptions.

1

Samson Oil and Gas Limited
Unaudited Combined Pro Forma Statement of Operations
Nine Months Ended March 31, 2016

	Samson Oil and Gas Limited Historical Amounts			Foreman Butte Historical Amounts			Pro Forma Adjustments					Combined Pro Forma Amounts
REVENUES AND OTHER INCOME:
Oil sales	$	960,705		$	4,819,964		$	-			$	5,780,669
Gas sales		156,333			35,651			-				191,984
Other liquids		9,580			-			-				9,580
Interest income		255			-			-				255
Other		879,330			46,129			-				925,459
TOTAL REVENUE AND OTHER INCOME		2,006,203			4,901,744			-				6,907,947
EXPENSES:
Lease operating expense		(661,394	)		(5,477,090	)		-				(6,138,484	)
Depletion, depreciation and amortization		(791,104	)		-			(1,692,864	)	a)		(2,483,968	)
Impairment expense		(49,126	)		-			-				(49,126	)
Exploration and evaluation expenditure		(21,399	)		-			-				(21,399	)
Accretion of asset retirement obligations		(15,353	)		-			-				(15,353	)
Amortization of borrowing costs		(35,485	)		-			-				(35,485	)
Interest expense		(207,650	)		-			(860,625	)	b)		(1,068,275	)
Loss on  derivative instruments		(358,514	)		-			-				(358,514	)
Acquisition costs		(215,853	)		-			-				(215,853	)
General and administrative		(902,455	)		-			-				(902,455	)
TOTAL EXPENSES		(3,258,333	)		(5,477,090	)		(2,553,489	)			(11,288,912	)
Loss from operations		(1,252,130	)		(575,346	)		(2,553,489	)			(4,380,965	)
Income tax benefit		-			-			-				-
Net loss		(1,252,130	)		(575,346	)		(2,553,489	)			(4,380,965	)
OTHER COMPREHENSIVE GAIN (LOSS)
Foreign currency translation gain/(loss)		(1,653	)		-			-				(1,653	)
Total comprehensive loss for the period	$	(1,253,783	)	$	(575,346	)	$	(2,553,489	)		$	(4,382,618	)
Net loss per ordinary share from operations:
Basic – dollars per share		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Diluted – dollars per share		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Weighted average ordinary shares outstanding:
Basic		2,837,834,301			2,837,834,301			2,837,834,301				2,837,834,301
Diluted		2,837,834,301			2,837,834,301			2,837,834,301				2,837,834,301

2

Samson Oil and Gas Limited
Unaudited Combined Pro Forma Statement of Operations
Twelve Months Ended June 30, 2015

	Samson Oil and Gas Limited Historical Amounts			Foreman Butte Historical Amounts			Pro Forma Adjustments					Combined Pro Forma Amounts
REVENUES AND OTHER INCOME:
Oil sales	$	12,460,171		$	15,892,857		$	-			$	28,353,028
Gas sales		834,835			303,114			-				1,137,949
Interest income		30,759			-			-				30,759
Gain on derivative instruments		3,112,268			-			-				3,112,268
Gain on sale of oil and gas properties		-			-			-				0
Other		137,857			481,986			-				619,843
TOTAL REVENUE AND OTHER INCOME		16,575,890			16,677,957			-				33,253,847
EXPENSES:
Lease operating expense		(6,117,217	)		(13,558,177	)		-				(19,675,394	)
Depletion, depreciation and amortization		(6,920,945	)		-			(2,742,032	)	a)		(9,662,977	)
Impairment of oil and natural gas properties		(21,475,450	)		-			-				(21,475,450	)
Exploration and evaluation expenditure		(12,686,943	)		-			-				(12,686,943	)
Accretion of asset retirement obligations		(40,159	)		-			-				(40,159	)
General and administrative		(4,812,668	)		-			-				(4,812,668	)
Abandonment Expense		(404,485	)		-			-				(404,485	)
Borrowing costs		(135,694	)		-			-				(135,694	)
Interest expense		(598,940	)		-			(1,147,500	)	b)		(1,746,440	)
TOTAL EXPENSES		(53,192,501	)		(13,558,177	)		(3,889,532	)			(70,640,210	)
Loss before income tax		(36,616,611	)		3,119,780			(3,889,532	)			(37,386,363	)
Income tax (provision)/ benefit		(3,021	)		-			-				(3,021	)
Net loss	$	(36,619,632	)	$	3,119,780		$	(3,889,532	)		$	(37,389,384	)
OTHER COMPREHENSIVE LOSS
Foreign Currency Translation loss		(305,840	)		-			-				(305,840	)
Total comprehensive loss for the period	$	(36,925,472	)	$	3,119,780		$	(3,889,532	)		$	(37,695,224	)
Net loss per common share:
Basic – dollars per share		(0.01	)		0.00			(0.00	)			(0.02	)
Diluted – dollars per share		(0.01	)		0.00			(0.00	)			(0.02	)
Weighted average common shares outstanding:
Basic		2,837,777,322			2,558,418,209			2,558,418,209				1,935,438,970
Diluted		2,837,777,322			2,558,418,209			2,558,418,209				1,935,438,970

3

Samson Oil and Gas Limited

Notes to Unaudited Combined Pro Forma Statement of Operations

The accompanying unaudited combined pro forma statement of operations for the nine months ended March 31, 2016 and for the twelve months ended June 30, 2016 assumes that the acquisition of the Foreman Butte Properties occurred as of July 1, 2014. The following adjustments have been made to the accompanying pro forma statement of operations:

a) To adjust depletion and depreciation expense for the Foreman Butte acquisition properties based on the bargain purchase acquisition price of $23.9 million as at March 31, 2016. The pro forma adjustment is based on production and reserve information summarized under Pro Forma Supplementary Financial Information for Oil and Gas Producing Activities (unaudited) below.

b) To adjusted interest expense for the Foreman Butte acquisition properties based on the additional interest expense that would have been incurred assuming the same form of financing the Company used to finance the acquisition had it occurred on July 1, 2014.

Proposed Bargain Purchase Accounting

After examining other similar transactions in the similar period from October 2015 to March 2016, Samson has determined that the fair value of the assets purchased was greater than the value paid for the assets. Samson has used the reserve report information generated as at March 31, 2016 as the basis for the fair value of the acquisition. The proved developed producing reserve value of the wells, based on the forward strip pricing at March 31, 2016 was $23,967,900. This is a preliminary valuation and remains subject to further review by both us and our auditors. The review may result in the fair value of the acquisition being higher or lower than the $23.9 million currently proposed. In performing the review of the valuation, we will look at the reasonableness of the assumptions used in the reserve estimation, including but not limited to cost and production inputs and estimates, commodity price estimates and the discount rate used in the valuation. We will also review the risk associated with the proved developed non producing and proved undeveloped wells and well locations. In addition to the review of the reserve report information, we will also review other trade sale value information that is publicly available.

The acquisition price was $16,160,000, including customary adjustments. As a result of this difference between the acquisition price and the preliminary fair value, Samson may book approximately $7.8 million in other income. This value is subject to the finalization of the fair value amount. Samson expects this income to be recognized in the Statement of Operations for the twelve months ended June 30, 2016.

Samson has sought a consultation with the Office of Chief Accountant at the Securities and Exchange Commission with respect to this accounting treatment. This process is ongoing and is expected to be resolved prior to filing its Form 10-K for the twelve months ended June 30, 2016.

Supplemental Oil and Gas Reserve Information (Unaudited)

Oil and Gas Reserve Information

The following tables summarize the net ownership interests in estimated quantities of proved developed producing, proved developed non producing and proved undeveloped oil and natural gas reserves of the 2016 Foreman Butte Acquisition Properties for the periods indicated, estimated by management and Samson’s external reserve engineers, Netherland & Sewell Associates Inc., and the related summary of changes in estimated quantities of net remaining proved reserves during the periods indicated combined with the Samson reserves. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, reserve estimates are expected to change as additional performance data becomes available.

4

	Samson Oil and Gas Limited Historical Information - BOE			Foreman Butte Acquistion - BOE			Pro Forma Total - BOE
Balance at July 1, 2014		1,773,000			3,040,811			4,813,811
Extension and discoveries		446,000			-			446,000
Production		(269,000	)		(282,122	)		(551,122	)
Revisions to previous estimates		(467,000	)		(118,504	)		(585,504	)
Balance at June 30, 2015		1,483,000			2,640,185			4,123,185
Extension and discoveries		-			-			-
Production		(199,401	)		(148,812	)		(348,213	)
Revisions to previous estimates		(102,995	)		4,734,901			4,631,906
Balance at March 31, 2016		1,180,604			7,226,274			8,406,878
As at March 31, 2016
Proved Developed Producing		1,180,604			2,106,900			3,287,504
Proved Developed Non Producing		-			1,424,840			1,424,840
Total Proved Developed		1,180,604			3,531,740			4,712,344
Proved Undeveloped		-			3,694,534			3,694,534
Total Proved		1,180,604			7,226,274			8,406,878
As at June 30, 2015
Proved Developed Producing		1,483,000			2,640,185			4,123,185
Proved Developed Non Producing		-			-			-
Proved Undeveloped		-			-			-
Total Proved		1,483,000			2,640,185			4,123,185

Barrel of Oil Equivalent (BOE) assumes a ratio of 6 MCF of natural gas per barrel of oil.

For the twelve months ended June 30, 2015 and the nine months ended March 31, 2016 the revisions to estimates for the Samson Historical Information relates to downward revisions to the forward decline curve for existing wells based on the historical performance of those wells or a change in the economic life of well as impacted by the decline in commodity prices.

For the nine months ended March 31, 2016, revisions to previous estimates includes revisions to proved non producing (“PDNP”) wells and proved undeveloped (“PUD”) well locations. Revisions to PDNP locations added 1.4 million BOE to total proved reserves and revisions to PUD locations added 3.7 million BOE to proved reserves.

5

The seller of the 2016 Foreman Butte Acquisition Properties was a predominately Bakken producer in North Dakota and Montana. As such, when a non-Bakken well stopped producing for any reason – mechanical or otherwise – the seller would often not invest any time or capital to restart production. As there was no plan to recommence production associated with these shut in wells, no value was ascribed to them in previous reserve reports. Samson has reviewed the engineering associated with these wells and following a change in the estimated operating cost structure and a small workover program (the capital cost of which is included in the reserve valuation) these previously shut in wells are now expected to be put back into production and produce at economic levels and therefore have been included in the reserve report. A portion of the proved non producing wells have also been recognized in the reserve report following evidence provided to the reserve engineer that indicates that stimulating some of these wells with acid could provide an uplift in production. This uplift is also included in the revisions to previous estimates.

In addition to the proved non producing wells, Samson has also added 3.7 million BOE in PUD reserves in the revisions of previous estimates category. The decreasing costs to drill a well have meant that these wells, which are estimated to cost approximately $2.8 million to drill, represent economic value based on SEC prices as at March 31, 2016. The reserves detailed above include 12 proved undeveloped well locations. These wells will be financed through a combination of free cash flow and additional capital (either debt or equity) that Samson anticipates raising in the future. While Samson’s ability to raise additional capital cannot be guaranteed, management believes that its plans for future of development of PUDs are reasonable and achievable in the current economic environment.

Proved reserves are estimated quantities of oil and natural gas which geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e. prices and costs) existing at the time the estimate is made. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates are made.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves

The following tables set forth the combined computation of the standardized measure of discounted future net cash flows relating to proved oil and gas reserves and the changes in standardized measure of discounted future net cash flows for the 2016 Foreman Butte Acquisition Properties and the historical Samson properties in accordance with ASC 932, Extractive Activities – Oil and Gas and based on oil and natural gas reserve and production volumes. Future cash inflows as of June 30, 2015 and March 31, 2016 were computed by applying average prices (calculated as the unweighted arithmetic average of the first-day-of-the-month oil and gas prices for each month within the twelve month periods ended June 30, 2015 and March 31, 2016) to estimate future production. Future production and development costs are computed by estimating the expenditures to be incurred in developing and producing the proved oil and natural gas reserves at period end, based on period-end costs and assuming the continuation of existing economic conditions. Prices changes based on inflation, federal regulatory changes, supply and demand are not considered. Estimated future production costs related to period-end reserves are based on period-end costs. Such costs include, but are not limited to, production taxes and direct operating costs. Inflation and other anticipatory costs are not considered until the actual change takes effect. In accordance with the ASC 932, a discount rate of 10% is applied to the annual future net cash flows.

The prices, calculated as described above, were $68.17 per barrel of oil and $3.390 per MMBTU of natural gas at June 30, 2015 and $42.77 per barrel of oil and $2.93 per MMBTU of natural gas at March 31, 2016. The prices were based on index prices, which have been adjusted for historical average location and quality differentials. Future cash inflows were reduced by estimated future development and production costs based on period-end costs resulting in net cash flow before tax. Due to the historic net operating losses recognized by Samson and the significant amount of intangible drilling costs to be incurred in these cash flows, estimated taxes have not been included in this forecast.

The Standardized Measure is not intended to be representative of the fair market value of the proved reserves. The calculations of revenues and costs do not necessarily represent the amounts to be received or expended. Accordingly, the estimates of future net cash flows from proved reserves and the present value thereof may not be materially correct when judged against actual subsequent results. Further, since prices and costs do not remain static, and no price or cost changes have been considered, and future production and development costs are estimates to be incurred in developing and producing the estimated proved oil and gas reserves, the results are not necessarily indicative of the fair market value of estimated proved reserves, and the results may not be comparable to estimates disclosed by other oil and gas producers.

6

	March 31, 2016
	Samson Oil and Gas Limited Historical Information			Foreman Butte Acquisition			Pro Forma Total
Future cash inflows	$	35,762,960		$	242,328,700		$	278,091,660
Future production costs		(19,900,530	)		(113,065,600	)		(132,966,130	)
Future development costs		-			(36,207,900	)		(36,207,900	)
Future income tax		-			-			-
Future net cash flows		15,862,430			93,055,200			108,917,630
10% annual discount for estimated timing of cash flows		(4,916,772	)		(51,491,000	)		(56,407,772	)
Standardized measure of discounted future cash flows	$	10,945,658		$	41,564,200		$	52,509,858

Changes in the standardized measure are as follows:

	Samson Oil and Gas Limited Historical Information			Foreman Butte Acquisition			Pro Forma Total
As at July 1, 2015	$	34,253,000		$	48,485,300		$	82,738,300
Sales of oil and gas produced, net of production costs		(2,410,383	)		-			(2,410,383	)
Net changes in prices and production costs		(21,981,373	)		(34,406,977	)		(56,388,350	)
Extensions, discoveries and improved recoveries		-			-			-
Previously estimated development costs incurred during the period		38,000			-			38,000
Net changes in future development costs		-			(36,207,900	)		(36,207,900	)
Revisions of previous quantity estimates		(2,378,886	)		58,845,247			56,466,361
Accretion of discount		3,425,300			4,848,530			8,273,830
Net change in income tax		-			-			-
Changes in timing of estimated cashflow and others		-			-			-
As at March 31, 2016	$	10,945,658		$	41,564,200		$	52,509,858

7

EX-99.3

Exhibit 99.3

 

February 11, 2016

Mr. Terence M. Barr

Samson Oil & Gas Limited

1331 17^th Street, Suite 710

Denver, Colorado 80202

Dear Mr. Barr:

In accordance with your request, we have estimated the proved reserves and future revenue, as of October 1, 2015, to the Potential Acquisition interest in certain oil and gas properties located in Montana and North Dakota, as listed in the accompanying tabulations. It is our understanding that Samson Oil & Gas Limited (Samson) plans to purchase this interest in these properties. We completed our evaluation on or about the date of this letter. This report has been prepared using price and cost parameters specified by Samson, referred to as the Bank Case, as discussed in subsequent paragraphs of this letter. The estimates in this report have been prepared in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers (SPE); definitions are presented immediately following this letter.

We estimate the net reserves and future net revenue to the Potential Acquisition interest in these properties, as of October 1, 2015, to be:

	Net Reserves		Future Net Revenue (M$)
	Oil	Gas		Present Worth
Category	(MBBL)	(MMCF)	Total	at 10%
Proved Developed Producing	2,147.6	1,049.2	44,543.8	22,754.7
Proved Developed Non-Producing	1,188.9	2,240.7	17,214.9	11,284.2
Proved Undeveloped	3,343.7	2,340.6	52,772.6	17,609.2
Total Proved	6,680.3	5,630.5	114,531.3	51,648.1

Totals may not add because of rounding.

The oil volumes shown include crude oil, condensate, and natural gas liquids (NGL). Oil volumes are expressed in thousands of barrels (MBBL); a barrel is equivalent to 42 United States gallons. Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.

The estimates shown in this report are for proved reserves. As requested, probable reserves that exist for these properties have not been included. No study was made to determine whether possible reserves might be established for these properties. This report does not include any value that could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The estimates of reserves and future revenue included herein have not been adjusted for risk.

This report includes summary projections of reserves and revenue by reserves category. Also included are reserves and economics data for each reserves category; these data include a summary projection of reserves and revenue along with one-line summaries of reserves, economics, and basic data by lease.

Gross revenue shown in this report is the interest owner's share of the gross (100 percent) revenue from the properties prior to any deductions. Future net revenue is after deductions for the interest owner's share of production taxes, ad valorem taxes, capital costs, and operating expenses but before consideration of any income taxes. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth, which is shown to indicate the effect of time on the value of money. Future net revenue presented in this report, whether discounted or undiscounted, should not be construed as being the fair market value of the properties.

 

 

As requested, this report has been prepared using oil and gas price parameters specified by Samson. Oil prices are based on NYMEX West Texas Intermediate prices and are adjusted for quality, transportation fees, and market differentials. Gas prices are based on NYMEX Henry Hub prices and are adjusted for energy content, transportation fees, and market differentials. All prices, before adjustments, are shown in the following table:

Period		Oil Price		Gas Price
Ending		($/Barrel)		($/MMBTU)
	02-29-2016		39.63		2.300
	12-31-2016		36.95		2.382
	12-31-2017		42.36		2.725
	12-31-2018		44.93		2.837
	12-31-2019		46.74		2.944
	Thereafter		48.07		3.065

Operating costs used in this report were provided by Samson and appear reasonable based on our knowledge of similar operations in the area. These costs include only direct lease- and field-level costs. Operating costs have been divided into per-well costs and per-unit-of-production costs. Headquarters general and administrative overhead expenses of Samson are not included. As requested, operating costs are not escalated for inflation.

Capital costs used in this report were provided by Samson and are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included as required for workovers, new development wells, and production equipment. Based on our understanding of future development plans, a review of the records provided to us, and our knowledge of similar properties, we regard these estimated capital costs to be reasonable. As requested, capital costs are not escalated for inflation. Also as requested, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties.

For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and facilities. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability.

We have made no investigation of potential volume and value imbalances resulting from overdelivery or underdelivery to the Potential Acquisition interest. Therefore, our estimates of reserves and future revenue do not include adjustments for the settlement of any such imbalances; our projections are based on the interest ownerreceiving its net revenue interest share of estimated future gross production.

The reserves shown in this report are estimates only and should not be construed as exact quantities. Proved reserves are those quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be commercially recoverable; probable and possible reserves are those additional reserves which are sequentially less certain to be recovered than proved reserves. Estimates of reserves may increase or decrease as a result of market conditions, future operations, changes in regulations, or actual reservoir performance. In addition to the primary economic assumptions discussed herein, our estimates are based on certain assumptions including, but not limited to, that the properties will be developed consistent with current development plans as provided to us by Samson, that the properties will be operated in a prudent manner, that no governmental regulations or controls will be put in place that would impact the ability of the interest owner to recover the reserves, and that our projections of future production will prove consistent with actual performance. If the reserves are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing this report.

 

For the purposes of this report, we used technical and economic data including, but not limited to, well logs, geologic maps, well test data, production data, historical price and cost information, and property ownership interests. The reserves in this report have been estimated using deterministic methods; these estimates have been prepared in accordance with generally accepted petroleum engineering and evaluation principles set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the SPE (SPE Standards). We used standard engineering and geoscience methods, or a combination of methods, including performance analysis, volumetric analysis, and analogy, that we considered to be appropriate and necessary to classify, categorize, and estimate reserves in accordance with the 2007 PRMS definitions and guidelines. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment.

The data used in our estimates were obtained from Samson, public data sources, and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting work data are on file in our office. We have not examined the titles to the properties or independently confirmed the actual degree or type of interest owned. The technical persons primarily responsible for preparing the estimates presented herein meet the requirements regarding qualifications, independence, objectivity, and confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed on a contingent basis.

	Sincerely,
	NETHERLAND, SEWELL & ASSOCIATES, INC.
	Texas Registered Engineering Firm F-2699
	By:  /s/ C.H. (Scott) Rees III
	C.H. (Scott) Rees III, P.E.
	Chairman and Chief Executive Officer
By:  /s/ Dan Paul Smith	By:  /s/ John G. Hattner
Dan Paul Smith, P.E. 49093	John G. Hattner, P.G. 559
Senior Vice President	Senior Vice President
Date Signed:  February 11, 2016	Date Signed:  February 11, 2016

BWJ:AHA

Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.

EX-99.4

Exhibit 99.4

 

June 14, 2016

Mr. Terence M. Barr

Samson Oil & Gas Limited

1331 17^th Street, Suite 710

Denver, Colorado 80202

Dear Mr. Barr:

In accordance with your request, enclosed is an as of date and price sensitivity to our report dated February 11, 2016, which sets forth our estimates of reserves and future revenue, as of October 1, 2015, to the Potential Acquisition interest in certain oil and gas properties located in Montana and North Dakota. The projections included in this sensitivity have not changed and have only been "rolled forward" to an as of date of March 31, 2016. It is our understanding that Samson Oil & Gas Limited has purchased this interest in these properties. The estimates in the February 2016 report were prepared in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers (SPE). For this sensitivity, estimates were prepared in accordance with the definitions and guidelines of the U.S. Securities and Exchange Commission (SEC) and, with the exception of the exclusion of future income taxes, conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas. Prices used in this sensitivity are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period April 2015 through March 2016. For oil volumes, the average West Texas Intermediate posted price of $42.77 per barrel is adjusted by field for quality, transportation fees, and market differentials. For gas volumes, the average Henry Hub spot price of $2.398 per MMBTU is adjusted by field for energy content, transportation fees, and market differentials. All prices are held constant throughout the lives of the properties. The average adjusted product prices weighted by production over the remaining lives of the properties are $35.35 per barrel of oil and $3.428 per MCF of gas.

Besides the sensitivity to as of date and prices, the projections, operating costs, capital costs, and development schedules used for this sensitivity are the same as in our February 2016 report. All other assumptions, parameters, and caveats set forth in our February 2016 report also apply to this sensitivity.

As stated above, for this sensitivity, cost parameters were not changed. Operating costs used were provided by Samson and appear reasonable based on our knowledge of similar operations in the area. These costs include only direct lease- and field-level costs. Operating costs have been divided into per-well costs and per-unit-of-production costs. Headquarters general and administrative overhead expenses of Samson are not included. As requested, operating costs are not escalated for inflation.

Capital costs used were provided by Samson and are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included as required for workovers, new development wells, and production equipment. Based on our understanding of future development plans, a review of the records provided to us, and our knowledge of similar properties, we regard these estimated capital costs to be reasonable. As requested, capital costs are not escalated for inflation. Also as requested, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties.

Enclosed for this sensitivity case is a summary projection of reserves and revenue for each reserves category. One-line summaries of reserves, economics, and basic data by lease and individual lease projections can be provided under separate cover. Please let us know if you would like this sensitivity to be set forth in a formal reserves report.

 

 

As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment. The technical persons responsible for preparing the reserves estimates presented herein meet the requirements regarding qualifications, independence, objectivity, and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed on a contingent basis. Netherland, Sewell & Associates, Inc. performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F-002699.

Please call if you have any questions regarding the enclosed data or if you need anything else at this time.

Sincerely,

/s/ Benjamin W. Johnson

Benjamin W. Johnson

Vice President

BWJ:AHA

Enclosures

Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.