Samson Oil & Gas Ltd. ADR (fka SSNYY)

[OilStockReport]

Another update for this company...

We have mentioned this before, and we will mention it again, M&A activity in the oil market is growing. Keeping your eyes open for buyout possibilities is probably a good idea if you want to make a solid investment. Well, luckily, we have found 3 possible candidates who could make you some cash on the buyout. Isac Simon suggests these three, and we think he is on the right track.



Increased production in the Bakken shale and higher price realizations ensured fantastic growth for this small cap. Revenues grew 106% to $5.9 million in the last fiscal year. Samson has focused more on liquids with oil production up by 106% to 64,000 barrels of oil. With more than 90% of existing reserves already developed, future cost of development should be a problem. Additionally, the company’s recent success in the promising Niobrara shale should fuel growth for the next few years. With a healthy cash balance of $58 million, it leaves ample room for further expansion. In short, this company’s properties are on the sweet spots.




The company’s strategy to spend heavily on its drilling projects might not look too attractive now. But once production starts picking up — which I’ll put my money on — things will start looking attractive. The second quarter saw a 106% rise in oil production and an 11% drop in natural gas production year over year. That’s clearly the transition this company has been making. Not surprisingly, the results are already showing with revenue jumping up 72% in the first half of 2011. In August, management increased capital expenditures by almost 40% to $1.8 billion, excluding acquisitions, for this year. That interests me. While a precise update isn’t currently available, I suspect a major drilling success that must have increased the company’s developed resources substantially.



This company has come a long way in the last 12 months. Somehow, its real potential never got reflected in its numbers. However, things have been changing since. This Bakken player operates on one of the sweetest spots in the region. With 93,000 net acres, Kodiak’s progress has been steady. The company took delivery of its fifth rig earlier this month and has a current production of more than 7,500 barrels of oil equivalent per day. Excluding acquisitions, Kodiak is confident of exiting this year at 9,000 BOE/D. Sales volumes grew substantially in the first nine months of the year — a fantastic 151% growth compared to the corresponding period last year. With more land acquisitions and an expanding pipeline infrastructure, Kodiak looks like a perfect growth stock. With a market cap of $1.3 billion, the company doesn’t look too hard to be acquired.



Each of these stocks are some of our favorite picks for 2011. If they sell out, they could be great money makers too. Some extra due diligence wouldn’t hurt here. Keeping up on the news of these companies could keep you on top and able to buy in before the buyout happens and the stock spikes.