IS THE US EQUITY MARKET IMPORTANT TO SAMSON?

In January 2008, Samson Oil and Gas Limited officially listed on a “main board exchange” the American Stock Exchange (AMEX) now known as NYSE Amex. Since that time over 60% of Samson’s stock has migrated into our ADR program and is now traded on the NYSE Amex under the ticker symbol: SSN.

There were many reasons that Samson decided to list its shares in the US, a couple of them are:

1. We thought that it was likely that a US Investor might value Samson’s US assets at a higher level than their Australian counterparts and
2. We recognized that the equity market in the US was many times larger than Australia, which therefore gave our shares a larger exposure

While Samson stock is actively traded on the ASX, its trading on the NYSE Amex is much greater. For the month of December 2011 the trading ratio between the two markets was 5:1. That is for every share traded on the ASX, five times as many shares were traded on the NYSE Amex. The value of shares traded on the ASX for December was approximately US$7.3 million whereas US$34.0 million was traded on NYSE Amex (translated from AUD on the date of the transaction).

Experts in the field of share valuation state that to be fairly valued a share must be liquid; the adage often used is “Liquidity drives transparency of value”. In addition institutional investors are often dissuaded from buying a share that is illiquid despite liking the company’s business and valuation, because they would find it difficult to exit the investment at a future time if for whatever reason they chose to take that decision.

Thus liquidity has a very important element that has been achieved through Samson’s US listing.

From the desk of Robyn Lamont, CFO.

Thank you for taking the time to read our blog topic this week; our hope is to continue to inform our investors/interested investors about recent and concerning topics relative to the E&P industry.

Cheers

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