SAMSON OIL & GAS LIMITED

 

ABN 25 009 069 005

 

INTERIM FINANCIAL REPORT

 

31 December 2012

 

 

SAMSON OIL & GAS LIMITED

 

Table of Contents

 

 

Corporate Information	1
Directors’ Report	2
Consolidated Statement of Comprehensive Income	4
Consolidated Balance Sheet	5
Consolidated Cash Flow Statement	6
Consolidated Statement of Changes in Equity	7
Notes to the Half-Year Financial Statements	8
Directors’ Declaration	16
Auditor’s Independence Declaration	17
Independent Auditor’s Review Report	18

 

 

SAMSON OIL & GAS LIMITED

 

Corporate Information

 

 

Directors	Bankers
V. Rudenno (Chairman)	Bank of New Zealand Australia
T. Barr (Managing Director)	Perth, WA, 6000
D. Craig
K. Skipper	Bank of the West
	1000 North Summit Boulevard
Secretary	Frisco, CO 80443
D.I. Rakich
Registered Office & Business Address	Solicitors
Level 16, AMP Building	Squire Sanders
140 St Georges Terrace	152-158 St Georges Terrace
Perth, WA, 6000	Perth, WA, 6000
Telephone: +61 8 9220 9830
Facsimile:   +61 8 9220 9820
OPERATIONS OFFICE – DENVER	Auditors
1331 17th Street, Suite 710	PwC
Denver, CO, 80202	Brookfield Place
Telephone: +1 303 295 0344	125 St Georges Terrace
Facsimile:   +1 303 295 1961	Perth, WA, 6000
SHARE REGISTRY	Stock Exchange
Security Transfer Registrars Pty Ltd	Australian Stock Exchange Limited
770 Canning Highway	Code: SSN
Applecross, WA, 6153
Telephone: +61 8 9315 2333	NYSE Mkt US
Facsimile:   +61 8 9315 2233	Code: SSN
Australian Company Number	Australian Business Number
009 069 005	25 009 069 005

 

All amounts are in United States Dollars (US$), unless otherwise indicated.

 

 

SAMSON OIL & GAS LIMITED

 

Directors’ Report

 

   

Your directors submit their report on Samson Oil & Gas Limited and its consolidated entities (the “Consolidated Entity” or “Samson”) for the half-year ended 31 December 2012.

 

Directors

 

The names of the company’s directors in office during the half-year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

 

Mr Terence Maxwell Barr – Managing Director

Dr Victor Rudenno - Chairman

Mr Keith Skipper

Dr DeAnn Craig

 

Principal Activities

 

The principal continuing activities during the half-year of entities within the Consolidated Entity were oil and gas exploration, development and production in the United States of America.

 

Review and Results of Operations

 

Gross profit for the half year was $279,966 compared to $2,318,095 for the half year ended 31 December 2011. The consolidated entity’s net loss after tax for the half-year was $1,046,932 compared to a loss of $5,414,271 for the half-year ended 31 December 2011.

 

Operational

North Stockyard Oilfield

Samson and the Operator group of its North Stockyard project have negotiated an acreage swap for the Middle Bakken/First Bench of the Three Forks (MB/TF) whereby Samson will acquire these parties’ undeveloped acres in the Northern Tier and will divest undeveloped acres in the Southern Tier. Following the swap, Samson will own 64% and 57%, respectively, in the two overlapping 1,280 acre spacing units located in the Northern Tier. Samson will be the Operator for the entire Northern Tier. Samson’s net production from current producing wells will not be affected.

 

The formal agreement documenting the swap between the Operator and Samson was completed on 1 January 2013. Samson has identified 14 infill development wells that can be drilled between the existing Bakken wells and in the Three Forks Formation with 160 acre spacing. The North Dakota Industrial Commission has approved the spacing order for these wells and the first four drilling permits have been received.

 

The wells are planned to be drilled from pads that would accommodate multiple well heads. Samson is planning to drill an initial 8 development wells from two pads utilising the skiddable platform available on Frontier 24 subject to financing. The development wells are designed as 6,300 foot horizontals in either the Middle Bakken or the First Bench of the Three Forks. The wells will be “batched” drilled which is expected to result in considerable cost savings.

 

Samson’s ability to complete the development plan is contingent on the completion of a planned debt financing or another capital raising program.

 

 

SAMSON OIL & GAS LIMITED

 

Directors’ Report

 

 

Exploration

South Prairie Project

Samson acquired a 25% working interest in 25,024 net acres, which is located on the eastern flank of the Williston Basin in North Dakota for $1.4 million. The target reservoir for the project is the Mississippian Mission Canyon Formation. Seventy-six square miles of 3-D seismic data have been shot and processed. The data is currently being interpreted and the first prospect has been defined. The first prospect, named Forfar, is anticipated to be drilled in April 2013 and will be targeting a 420 acre 4-way dip closed structure in the Glenburn zone of the Mississippian Mission Canyon Formation at a depth of approximately 4,700 feet. If successful, the structure would allow for the drilling of up to 9 development locations drilled on 40-acre spacing.

 

Auditor’s Independence Declaration

 

The independence declaration received from the auditor of Samson Oil & Gas Limited is set out on page 17 and forms part of this Directors’ Report for the half-year ended 31 December 2012.

 

Signed in accordance with a resolution of the directors.

 

/s/ Terence M. Barr

 

T. M. Barr

Director

 

Denver, Colorado

12 February 2013

 

 

SAMSON OIL & GAS LIMITED

consOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the half-year ended 31 December 2012

 

 

		NOTE
				Half-year ended 31 December
				2012				2011
				US$				US$
Revenue from continuing operations
Sale of oil and gas		3(a)			3,272,881				4,423,626
Finance revenue		3(a)			126,779				199,237
Total revenue					3,399,660				4,622,863
Cost of sales		3 (a)			(3,119,694	)			(2,304,768	)
Gross profit					279,966				2,318,095
Other income		3(a)			111,481				21,136
Depreciation expense					(47,638	)			(34,120	)
Employee benefits expense					(1,320,747	)			(2,267,531	)
Finance costs		3 (c)			(21,428	)			(18,465	)
Impairment expense					(221,629	)			(4,740,828	)
Exploration expense					(400,950	)			(4,740,828	)
General and administration expenses		3 (b)			(1,460,923	)			(1,574,121	)
Loss before income tax					(3,081,868	)			(6,295,834	)
Income tax benefit		4			2,034,936				881,563
Net loss after income tax for the year attributable to owners of Samson Oil & Gas Limited					(1,046,932	)			(5,414,271	)
Other comprehensive income/(expense)
Items that may be reclassified to profit and loss
Net foreign currency translation differences					89,068				(350,005	)
Total comprehensive expense for the period attributable to equity holders of the parent					(957,864	)			(5,764,276	)
Basic loss per share (cents) from continuing operations attributable to ordinary equity holders of the Company
Basic loss per share (cents)					(0.06	)			(0.31	)
Diluted loss per share (cents)					(0.06	)			(0.31	)

 

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

 

 

 

SAMSON OIL & GAS LIMITED

consOLIDATED BALANCE SHEET

As at 31 December 2012

 

 

		Note		31-Dec-12				30-Jun-12
				$				$
Current assets
Cash and cash equivalents					9,725,162				18,845,894
Trade and other receivables					1,257,023				1,288,161
Pipe inventory					78,943				78,943
Tax receivable					6,383,492				4,348,456
Prepayments					240,400				344,108
Total current assets					17,685,020				24,905,562
Non-current assets
Other receivables					100,575				99,961
Plant and equipment					403,921				448,061
Exploration and evaluation assets		5			22,092,965				16,515,686
Oil and gas properties					12,696,274				12,740,890
Total non-current assets					35,293,735				29,804,598
Total assets					52,978,755				54,710,160
Current liabilities
Trade and other payables					2,405,324				6,655,267
Total current liabilities					2,405,324				6,655,267
Non-current liabilities
Borrowings					-				7,322
Provisions					1,305,406				1,279,211
Total non-current liabilities					1,305,406				1,286,533
Total Liabilities					3,710,730				7,941,800
Net assets					49,268,025				46,768,360
Equity
Contributed equity					80,900,807				77,557,896
Accumulated losses					(39,637,861	)			(38,590,929	)
Reserves					8,005,079				7,801,393
Total equity					49,268,025				46,768,360

 

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

 

 

SAMSON OIL & GAS LIMITED

 

consolidated Cash Flow Statement

for the half-year ended 31 December 2012

 

 

		Half year ended 31 December
		2012				2011
		US$				US$
Cash flows from operating activities
Receipts from customers and debtors			3,487,463				4,486,797
Cash received from commodity derivative financial instrument			-				38,508
Payments to suppliers and employees			(4,464,796	)			(4,200,663	)
Interest received			138,544				196,890
Tax paid			(100	)			-
Net cash flows (used in)/from operating activities			(838,889	)			521,532
Cash flows from investing activities
Cash paid for acquisition of office equipment			(10,392	)			(51,495	)
Prepaid cash for oil and gas development			-				(467,041	)
Cash paid for oil and gas properties and development			(1,140,341	)			(1,462,544	)
Payments for exploration and evaluation			(10,371,563	)			(14,518,508	)
Net cash flows used in investing activities			(11,522,296	)			(16,499,588	)
Cash flows from financing activities
Proceeds from exercise of options			3,132,420				297,229
Net cash flows from financing activities			3,132,420				297,229
Net (decrease)/increase in cash and cash equivalents held			(9,228,765	)			(15,680,827	)
Effects of foreign exchange on cash balances			108,033				(362,831	)
Cash and cash equivalents at beginning of period			18,845,894				58,448,477
Cash and cash equivalents at end of period			9,725,162				42,404,819

 

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

 

 

SAMSON OIL & GAS LIMITED

 

consolidated Statement of Changes in Equity

for the half-year ended 31 December 2012

 

  

		Contributed Equity				Accumulated Losses				Foreign Currency Translation Reserve				Options Reserve				Equity Reserves				Total
		US$				US$				US$				US$				US$				US$
At 1 July 2011			76,925,795				(7,519,490	)			4,187,574				4,036,193				(1,097,780	)			76,532,292
Loss for the period			-				(5,414,271	)			-				-				-				(5,414,271	)
Other comprehensive expense			-				-				(350,005	)			-				-				(350,005	)
Total comprehensive expense for the period			-				(5,414,271	)			(350,005	)			-				-				(5,764,276	)
Share based payments			-				-				-				716,092				-				716,092
Issue of share capital			297,229				-				-				-				-				297,229
At 31 December 2011			77,223,024				(12,933,761	)			3,837,569				4,752,285				(1,097,780	)			71,781,337
At 1 July 2012			77,557,896				(38,590,929	)			3,870,539				5,028,634				(1,097,780	)			46,768,360
Loss for the period			-				(1,046,932	)			-				-				-				(1,046,932	)
Other comprehensive income			-				-				89,068				-				-				89,068
Total comprehensive (expense)/income for the period			-				(1,046,932	)			89,068				-				-				(957,864	)
Share based payments			-				-				-				114,618				-				114,618
Issue of share capital			3,342,911				-				-				-				-				3,342,911
At 31 December 2012			80,900,807				(39,637,861	)			3,959,607				5,143,252				(1,097,780	)			49,268,025

 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

1.

Corporate Information

 

The condensed consolidated interim financial report of Samson Oil & Gas Limited (“the Company”) and its controlled entities together, the “Consolidated Entity” for the half-year ended 31 December 2012 was authorised for issue in accordance with a resolution of the directors on 11 February 2013.

 

Samson Oil & Gas Limited is a company incorporated in Australia and limited by shares, which are publicly traded on the Australian Stock Exchange (ASX code “SSN”).

 

On 7 January 2008 the Company commenced trading of its American Depositary Shares (“ADS’s”) on the NYSE Mkt (previously known as NYSE Amex). Each ADS represents 20 ordinary Samson shares.

 

2.

BASIS OF PREPARATION OF HALF-YEAR REPORT

 

The half-year consolidated financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134 Interim Financial Reporting.

 

The half-year financial report does not include all notes of the type normally included within the annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements by Samson Oil & Gas Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

 

The accounting policies adopted are consistent with those of the previous financial reporting year and corresponding interim reporting period.

 

The financial report is presented in United States Dollars (US$).

 

The Company is currently working on the continued development of its North Stockyard Project in North Dakota. This development plan is dependent on the Company completing a planned debt financing or other capital raising plan. Should the Company not be able to secure the required funding, the development program will be suspended until the required funding can be secured. The Company has the ability to cancel its current rig contract with the payment of a $5 million cancellation fee. The current Board approved cash flow forecasts are prepared on the basis of no additional funding or further development of the North Stockyard project. Based on these forecasts, the Board are satisfied that the Company has the ability to continue as a going concern for twelve months from the date of this report and will realize its assets and settle its liabilities and commitments in the normal course of business and for at least the amounts which are stated in the financial report.

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

3.

REVENUE, INCOME AND EXPENSES

 

		2012				2011
		US$				US$
Revenue, income and expenses from operations
(a) Revenue
Sale of oil and gas
Oil sales			2,903,775				3,842,442
Gas sales			364,907				573,263
Other			4,199				7,921
			3,272,881				4,423,626
Finance revenue			126,779				199,237
Total Revenue			3,399,660				4,622,863
Cost of sales
Lease operating expenses			1,853,750				1,082,292
Depletion of oil and gas properties			1,265,944				1,222,476
			3,119,694				2,304,768
Other Income
Other			111,481				4,896
Gain on fixed forward swaps			-				16,240
			111,481				21,136

  

		2012				2011
		US$				US$
(b) Expenses
Consultants fees			179,101				254,702
Lease payments			121,983				105,304
Travel and accommodation			133,226				165,847
Insurance			182,009				124,856
Assurance and Advisory			266,560				386,079
Investor Relations			82,169				30,366
Legal fees			246,020				245,583
Filing and listing fees			33,048				15,148
Other			216,807				246,236
Total			1,460,923				1,574,121

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

3.

REVENUE, INCOME AND EXPENSES (continued)

 

		2012				2011
		US$				US$
(c) Finance Costs
Accretion of asset retirement obligation			21,428				18,465
			21,428				18,465

 

4.

income tax

 

		Dec-12				Jun-12
		US$				US$
Profit/(Loss) before income tax from continuing operations			(3,081,868	)			(6,295,834	)
At the Australian statutory income tax rate of 30% (2011: 30%)			924,560				1,888,750
Expenditure not allowable for income tax purposes			(3,004	)			(217,556	)
Effect of US tax rate differential			128,435				262,576
Deferred tax assets not brought to account as realisation is not regarded as probable			(1,049,991	)			(1,052,207	)
Overprovision in prior year *			2,034,936				-
Income tax benefit reported in the statement of comprehensive income			2,034,936				881,563

 

* Overprovision relates to an income tax receivable resulting from the ability to use carryback losses incurred in prior periods to offset tax liability previously paid.

 

The Consolidated Entity has estimated tax losses carried forward arising in Australia of $9,929,319 (As of 30 June 2012: $9,553,496). The benefit of these losses of $2,978,796 (as of 30 June 2012: $2,866,049) will only be obtained in future years if:

 

i. the Consolidated Entity derives future assessable income of a nature and an amount sufficient to enable the benefit from the deduction for the losses to be realised; and

 

ii. the Consolidated Entity has complied and continues to comply with the conditions for deductibility imposed by law; and

 

iii. no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit from deduction for the losses.

 

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

4.

Income Tax (continued)

 

The Consolidated Entity has estimated available Federal net operating losses in the United States of approximately $22,819,880 (As of 30 June 2012: $20,538,589). The utilisation of approximately $9,209,603 (As of 30 June 2012: $9,209,603) is limited to an estimated $403,194 (As of 30 June 2012: $403,194) per year as a result of a change in ownership of the one of the subsidiaries which occurred in January 2005. If not utilised, the tax net operating losses will expire during the period from 2019 to 2025. Of the $9,209,603, net operating losses subject to limitation as a result of the ownership change, $3,967,177 will never be utilised and will expire by June 2025.

 

The loss generated in the tax return for the year ended 30 June 2012 exceeded the amount of available income to carry-back to the year ended 30 June 2011. As a result the entire benefit from 30 June 2011 will be recognised and no further carry back is available.

 

The Consolidated Entity has recorded income receivable from the Internal Revenue Service in the United States of $6.4 million. $5.6 million of this receivable was received subsequent to 31 December 2012, but prior to the signing of this report. $0.7 million remains as a receivable.

 

In addition to the abovementioned Federal carried forward losses in the United States, the Consolidated Entity also has approximately $11,018,551 (As of 30 June 2012: $10,972,204) of State carried forward tax losses, with expiry dates between June 2012 and June 2032. A deferred income tax asset in relation to these losses has not been recognised as realisation of the benefit is not regarded as probable.

 

The deferred tax benefit the Consolidated Entity will ultimately realise is dependent both upon the loss recoupment legislation in the United States and taxable income at the time recoupment. The Consolidated Entity does not meet the definition of a group for the purposes of applying tax

consolidation.

 

5.

Exploration and evaluation assets

 

 

		Dec-12				Jun-12
		US$				US$
Balance at beginning of period			16,515,686				3,347,738
Costs capitalised during the period			5,901,006				38,300,582
Costs expensed during the period			(323,727	)			(25,132,634	)
Balance at the end of the period			22,092,965				16,515,686

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

5.

EXPLORATION AND EVALUATIONS ASSETS (continued)

 

The exploration and evaluation costs capitalised relates to expenditure incurred in relation to the Consolidated Entity’s three main exploration projects – Hawk Springs Project in Goshen County, Wyoming, Roosevelt Project in Roosevelt County, Montana and South Prairie Project in Renville and Ward Counties, North Dakota. Costs capitalised include acquisitions costs for 3D seismic shoots (in Hawk Springs and South Prairie), leasehold acquisition costs, well location permitting and building and drilling expenses for exploratory wells.

 

$7.2 million in cost relating to the drilling of the Spirit of America II well remains capitalised pending the completion of the fracture stimulation planned for this well. The carrying value of this well will be reviewed following analysis of the results of this stimulation, expected sometime during the 2013 calendar year.

 

The recoverability of the carrying value of deferred exploration and evaluation expenditure is dependent on the successful exploitation, or alternatively sale, of the respective areas of interest.

 

6.

DIVIDENDS PAID AND PROPOSED

 

No dividends have been paid or declared by the Company during the half-year or to the date of this report (half-year ended 31 December 2011: Nil).

 

7.

segment INFORMATION

 

Business Segments

 

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors.

 

The group operates in one business segment being oil and gas exploration, development and production.

 

The following table presents revenue and loss information regarding geographic segments for the half-year periods ended 31 December 2012 and 31 December 2011 as presented to the Board of Directors.

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

 

7.

Segment Information (continued)

 

		United States of America
		Continuing Operations								Unallocated								Consolidated
		2012				2011				2012				2011				2012				2011
		US$				US$				US$				US$				US$				US$
Segment revenue from external customers			3,277,724				4,253,535				121,936				170,091				3,399,660				4,423,626
Segment result before amortisation and impairment			(1,043,218	)			(4,003,750	)			(503,439	)			(1,035,488	)			(1,546,657	)			(5,039,238	)
Impairment of assets held for sale			-				-				-				-				-				-
Depreciation, amortisation and impairment			(1,535,211	)			(1,256,596	)			-				-				(1,535,211	)			(1,256,596	)
Segment result			(2,578,429	)			(5,260,346	)			(503,439	)			(1,035,488	)			(3,081,868	)			(6,295,834	)
Segment assets			44,140,683				72,662,955				8,838,072				6,094,663				52,978,755				78,757,618

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012 

 

 

8.

CONTINGENCIES

 

There are no unrecorded contingent assets or liabilities in place for the Consolidated Entity at balance date (2011: $Nil).

 

9.

contributed equity

 

Issued and paid up capital

 

		Dec-12				Jun-12
		US$				US$
Ordinary fully paid shares			80,900,807				77,557,896

  

		Six months ending
Movements in contributed equity for the year		31-Dec-12								31-Dec-11
		No. of shares				US$				No. of shares				US$
Opening balance			1,771,891,827				77,557,896				1,731,978,789				76,925,795
Shares issued upon exercise of options (i)			136,191,202				3,342,911				18,572,391				297,229
Transaction costs incurred			-				-				-				-
Shares on issue at balance date			1,908,083,029				80,900,807				1,750,551,180				77,223,024
Shares to be issued upon exercise of options			77,813,442				-				-				-
Shares to be issued as part of Kestrel acquisition (ii)			65,000				-				65,000				-
Closing Balance			1,985,961,471				80,900,807				1,750,616,180				77,223,024

 

(i)

During the six months ended 31 December 2012 the Company issued 136,191,202 ordinary shares upon the exercise of 136,191,202 options. The exercise price of these options was A$ 1.5 cents per share / US$ 1.6 cents per share (average price based on the exchange rate on the date of exercise) to raise US$3,342,911. Cash was received in relation to the exercise of 77,813,442 options prior to year end (by Samson or its share registry) however these shares were not issued until January 2013.

 

During the six months ended 31 December 2011 the Company issued 18,572,391 ordinary shares upon the exercise of 18,572,391 options. The exercise price of these options was A$ 1.5 cents per share / US$ 1.6 cents per share (average price based on the exchange rate on the date of exercise) to raise US$297,229.

 

 

SAMSON OIL & GAS LIMITED

 

Notes to the Half-Year Financial Statements

31 December 2012

 

  

9.

CONTRIBUTED EQUITY (continued)

 

(ii)

In prior years, shares were issued to Kestrel shareholders as part of the offer to non-US resident shareholders whereby they received five Samson shares for every one Kestrel share held. The Samson share price on the acceptance date of the offer was deemed to be the fair value of the share. As at balance date acceptances had been received for 65,000 (2011:65,000) shares which have not yet been issued. These shares will be issued upon the presentation of Kestrel Share Certificates by the owner of the shares.

 

Share issue costs of $nil were incurred (half-year ended 31 December 2011:$nil).

 

At the end of the half-year there were 159,927,768 (June 2012: 322,840,554) unissued ordinary shares in respect of which options were outstanding. Option holders do not have any right by virtue of the option to participate in any share issue of the Company or any related body corporate.

 

10.

events after the balance sheet date

 

The Consolidated Entity has recorded income receivable from the Internal Revenue Service in the United States of $6.4 million. $5.6 million of this receivable was received subsequent to 31 December 2012, but prior to the signing of this report. $0.7 million remains as a receivable on the Balance Sheet.

 

Since the end of the half-year, the directors are not aware of any other matters or circumstances not otherwise dealt with in the report or financial statements that have, or may significantly affect the operations, the results of the operations, or the state of affairs of the Company or the Group in the subsequent financial year.

 

 

SAMSON OIL & GAS LIMITED

 

Directors’ Declaration

31 December 2012

 

  

In the directors’ opinion:

 

(a)

the financial statements and notes set out on pages 4 to 15 are in accordance with the Corporations Act 2001, including:

 

(i)

complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

 

(ii)

giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date;

 

(b)

there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

 

This declaration is made in accordance with a resolution of the directors.

 

/s/ Terence M. Barr

 

T. M. Barr

Director

 

Denver, Colorado

12 February 2013

 

 

 

 

Auditor’s Independence Declaration

 

As lead auditor for the review of Samson Oil & Gas Limited for the half year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been:

 

a)

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

 

b)

no contraventions of any applicable code of professional conduct in relation to the review.

 

This declaration is in respect of Samson Oil & Gas Limited and the entities it controlled during the period.

 

/s/ Pierre Dreyer
Pierre Dreyer	Perth
Partner	12 February 2013
PricewaterhouseCoopers

 

PricewaterhouseCoopers, ABN 52 780 433 757

Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840

T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

 

Liability limited by a scheme approved under Professional Standards Legislation.

 

 

 

 

Independent auditor’s review report to the members of
Samson Oil & Gas Limited

 

Report on the Half-Year Financial Report 

We have reviewed the accompanying half-year financial report of Samson Oil & Gas Limited, which comprises the balance sheet as at 31 December 2012, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors’ declaration for the Samson Oil & Gas Limited Group (the consolidated entity). The consolidated entity comprises both Samson Oil & Gas Limited (the company) and the entities it controlled during that half-year.

 

Directors’ responsibility for the half-year financial report 

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

 

Auditor’s responsibility 

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Samson Oil & Gas Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

 

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

 

PricewaterhouseCoopers, ABN 52 780 433 757

Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840

T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

 

Liability limited by a scheme approved under Professional Standards Legislation.

 

 

 

 

Independent auditor’s review report to the members of
Samson Oil & Gas Limited (continued)

 

Conclusion

 Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Samson Oil & Gas Limited is not in accordance with the Corporations Act 2001 including:

 

(a)

giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

 

(b)

complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

 

/s/ PricewaterhouseCoopers

 

PricewaterhouseCoopers

 

/s/ Pierre Dreyer
Pierre Dreyer	Perth
Partner	12 February 2013