The Perth-based company today said the transaction is based on the extension of the Bluell Formation, which produces oil from the State of North Dakota L-1 well in the adjacent lease.

North Dakota L-1 has an expected ultimate recovery of 450,000 barrels of oil and 440,000 million cubic feet of gas.

Samson said under the deal, it would initially acquire 50% of a net 3303-acre holding.

The initial well involves two other unspecified North American companies and Samson’s working interest in the initial well will be 34.5%.

Because of ownership difference across the leased area Samson’s total working interest in the prospect is 41%, it said.

The prospect has the ability to deliver five locations with each well being drilled as a horizontal intersection.

Samson said wells in the field have estimated recoveries of up to 1.2 million barrels (MMbbl). The five horizontal wells would therefore be expected to recover 5.4MMbbl, of which Samson would have a net revenue interest of 1.7MMbbl.

Each well in the program will be dependent on the successful completion of the initial and subsequent wells, it said.

The first well in the program is expected to spud at the end of November.

It will be operated by a North American company, which has drilled nearly 100 horizontal wells into this stratigraphic unit.

“The acquisition is in line with the strategy of acquiring producing or near-producing assets which have the ability to be extended and are relatively low risk,” Samson said.