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Audit Committee Charter

AUDIT COMMITTEE CHARTER

I. Purpose

The Audit Committee (the “Committee”) is a standing committee of the Board of Directors (the “Board”) of Samson Oil & Gas Limited (“Samson”). The purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities relating to (i) the integrity of Samson’s financial statements and financial reporting process and Samson’s systems of internal accounting and financial controls; (ii) the performance of the internal auditors; (iii) the annual independent audit of Samson’s financial statements, the engagement of the independent auditors and the evaluation of the independent auditors’ qualifications, independence and performance; (iv) the compliance by Samson with legal and regulatory requirements, including Samson’s disclosure controls and procedures; (v) the evaluation of management’s process to assess and manage Samson’s enterprise risk issues; and (vi) the fulfillment of the other responsibilities set out herein. The Committee shall also prepare the report of the Committee required to be included in Samson’s annual proxy statement.

II. Composition

The Committee shall be comprised of at least three directors, none of whom shall be an employee of the Company and each of whom shall meet the independence and experience requirements of applicable law and the listing standards of the NYSE Amex and the Australian Securities Exchange.

At least one member of the Committee shall be an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K and be “financially sophisticated” pursuant to the NYSE Amex listing standards.

The members of the Committee shall be appointed by the Board. The Board may remove any member from the Committee at any time with or without cause.

III. Meetings

The Committee shall meet as frequently as is necessary to carry out its responsibilities, but at least quarterly. The Board shall name a chairman of the Committee, who shall prepare and/or approve an agenda in advance of each meeting and shall preside over meetings of the Committee. In the absence of the chairman, the Committee shall select a chairman for that meeting. A majority of the members of the Committee shall constitute a quorum and the act of a majority of the members present at a meeting where a quorum is present shall be the act of the Committee. The Committee may also act by unanimous written consent of its members. The Committee shall maintain minutes or other records of meetings and activities of the Committee.

An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting. Minutes for all meetings of the Committee shall be prepared to document the Committee’s discharge of its responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committee and shall be distributed periodically to the full Board.

The Committee shall at least annually meet separately with each appropriate member of Samson’s management and Samson’s independent auditors in separate executive sessions to discuss any matters that the Committee or any of these groups wishes to discuss privately.

IV. Authority and Responsibilities

The Committee’s principal responsibility is one of oversight. Samson’s management is responsible for preparing Samson’s financial statements, and Samson’s independent auditors are responsible for auditing and reviewing those financial statements. In carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to Samson’s financial statements or any professional certification as to the independent auditors’ work.

The designation or identification of a member of the Committee as an “audit committee financial expert” does not impose on such person any duties, obligations, or liability that are greater than the duties, obligations, and liability imposed on such person as a member of the Committee and Board in the absence of such designation or identification and the designation or identification of a member of the Committee as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the Committee or Board.

The Committee shall:

General


4.1	Periodically review with management, the independent auditors and legal counsel the effect of new or proposed regulatory and accounting initiatives on Samson’s financial statements and other public disclosures and take, or recommend that the Board take, appropriate action to comply with such law and rules.

4.2	Review and evaluate, at least annually, the adequacy of this charter and, if the Committee believes that any changes are necessary or appropriate, make recommendations concerning such changes to the Corporate Governance and Nominating Committee.

4.3	Perform an annual evaluation of the Committee’s performance, report the results of this evaluation to the Corporate Governance and Nominating Committee, together with recommendations, and make appropriate changes.

4.4	Regularly report to the Board regarding the actions and activities of the Committee, and review with the Board any issues that arise with respect to the quality or integrity of Samson’s financial statements, Samson’s compliance with legal or regulatory requirements, the performance and independence of the independent auditor or the performance of the internal audit function and other matters related to the Committee’s functions and responsibilities.
4.5
	Prepare the report required to be included in Samson’s annual proxy statement, in accordance with applicable rules and regulations.

4.6	Have the full resources and authority (i) to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of Samson; (ii) to engage outside legal, accounting or other consultants to advise the Committee and to approve the terms of any such engagement and the fees of any such legal, accounting or other consultant; and (iii) to request any officer or employee of Samson, Samson’s outside counsel, internal auditor, internal audit personnel or independent auditors to attend a meeting of Samson or to meet with any members of, or consultants to, the Committee.

4.7	Undertake such additional responsibilities as from time to time may be delegated to it by the Board, required by Samson’s Constitution or required by law or listing standards. The Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee.

Oversight of Relationship with Independent Auditors

4.8
	Directly appoint, retain, compensate, evaluate and terminate Samson’s independent auditors. The Committee shall have the sole authority to approve all engagement fees to be paid to the independent auditors. The independent auditors shall report directly to the Committee.
4.9
	Receive from the independent auditors, review and discuss written statements prepared in accordance with the Independence Standards Board, Standard No. 1, applicable law or listing standards, delineating all relationships between the independent auditors and Samson regarding relationships and services which may impact the objectivity and independence of the independent auditors. The statement shall include a description of all services provided by the independent auditors and related fees. The Committee shall actively discuss any disclosed relationships or services that may impact the objectivity and independence of the independent auditors, and if so determined by the Committee, take appropriate action to satisfy itself of the independence of the auditors.
4.10
	Pre-approve all engagement letters and fees for all auditing services (including providing comfort letters in connection with securities underwritings) and permitted non-audit services performed by the independent auditors, subject to any de minimus exception under Section 10A(i)(1)(B) of the Exchange Act and any rules promulgated thereunder. Pre-approval authority may be delegated to a Committee member or a subcommittee comprised of members of the Committee, and any such member or subcommittee shall report any decisions to the full Committee at its next scheduled meeting. The Committee shall not approve an engagement of independent auditors to render non-audit services that are prohibited by any applicable law or listing standards.
4.11
	Obtain annual assurance from the independent auditors that they (a) have complied with Section 10A (Audit Requirements), of the Exchange Act and the rules promulgated thereunder, and (b) they know of no violation of Rule 13b2-2 (Representations and Conduct in Connection with the Preparation of Required Reports and Documents) of the Exchange Act having occurred.
4.12
	Review the performance of Samson’s independent auditors annually. In doing so, the Committee shall consult with management and Samson’s internal auditors and shall obtain and review a report by the independent auditors describing their internal control procedures, material issues raised by their most recent internal quality control review, or by any inquiry or investigation by governmental or professional authorities within the preceding five years and the response of the independent auditors.
4.13
	Establish clear hiring policies for Samson’s employment of employees or former employees of its independent auditors, which shall meet the requirements of all applicable laws and listing standards.

Oversight of Internal Audit Function, Risk Management and Compliance

4.14
	Review annually the adequacy and quality of Samson’s financial and accounting staffing; the need, based on Samson’s level and types of activities the need for and scope of internal audit reviews; and the plan, budget and designation of responsibilities for any internal audit. This review shall include discussing with the both the internal and independent auditors the overall scope, plans and budget for the annual internal audit plan, including the adequacy of staffing and other factors that may affect the effectiveness and timeliness of the internal audits. In addition, the internal auditors shall report periodically to the Committee regarding any significant deficiencies in the design or operation of Samson’s internal controls, material weaknesses in internal controls and any fraud (regardless of materiality) involving persons having a significant role in the internal controls, as well as any significant changes in internal controls implemented by management during the most recent reporting period of Samson.
4.15
	Receive reports from management regarding, and shall review and discuss the adequacy and effectiveness of, Samson’s disclosure controls and procedures.
4.16
	Establish procedures for: (a) the receipt, retention and treatment of complaints received by Samson regarding accounting, internal accounting controls or auditing matters; and (b) the confidential, anonymous submission by employees of Samson of concerns regarding questionable accounting or auditing matters.
4.17
	Review the guidelines and policies that management has put in place to govern the process of monitoring, controlling, and reporting major risk exposures (whether financial, operating or otherwise).
4.18
	Review and evaluate at least annually Samson’s policies and procedures for hedging oil and natural gas.

Financial Reporting Processes and Disclosure Matters

4.19

Review, evaluate and discuss with the independent auditors and management Samson’s audited annual financial statements and other information that is to be included in Samson’s annual report on Form 10-K, including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the results of the independent auditors’ audit of Samson’s annual financial statement, and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards, applicable law or listing standards, including matters required to be discussed by Statement on Auditing Standards No. 61, as amended by Statement on Auditing Standards No. 90. Based on such review and discussion, the Committee shall make a determination whether to recommend to the Board that the audited financial statements be included in Samson’s Form 10-K.

4.20

Require the independent auditors to review Samson’s interim financial statements, and review and discuss with the independent auditors and management Samson’s interim financial statements and other information to be included in Samson’s quarterly reports on Form 10-Q, including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, prior to filing such reports with the SEC.

4.21

In connection with performing its duties related to financial reporting process and controls, the Committee shall:

4.21.1

Obtain and discuss with Samson’s management and its independent auditors reports from management and the independent auditors required by SEC rules and applicable professional standards, including any report regarding:

A.	Critical accounting policies and practices used by Samson;
B.	Analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including all alternative treatments of financial information within generally accepted accounting principles related to material items that have been discussed with Samson’s management, the ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the independent auditor;
C.	Major issues regarding accounting principles and financial statement presentations, including any significant changes in Samson’s selection or application of accounting principles; and
D.	Any other material written communications between the independent auditors and Samson’s management, such as any management letter or schedule of unadjusted differences.

4.21.2

Review with Samson’s independent auditors:

A.	Audit problems or other difficulties encountered by the independent auditors in the course of the audit process, including any restrictions on the scope of the independent auditors’ activities or on access to requested information;
B.	Significant disagreements between the independent auditors and management; and
C.	Management’s response to issues raised by the independent auditors.

Without excluding other possibilities, the Committee may wish to review with the independent auditor (i) any accounting adjustments that were noted or proposed by the auditor but were “passed” (as immaterial or otherwise), (ii) any communications between the audit team and the audit firm’s national office respecting auditing or accounting issues presented by the engagement and (iii) any “management” or “internal control” letter issued, or proposed to be issued, by the independent auditor to Samson.

Related Party Transactions

4.22

Review any transaction involving Samson and any related party at least once a year or upon any significant change in the transaction or relationship. The Committee shall also oversee any related party transactions. For these purposes, a “related party transaction” includes any transaction required to be disclosed pursuant to Item 404 of SEC Regulation S-K, as it may be amended from time to time. Under Item 404 as in effect on the date hereof, Samson is required to disclose any transaction occurring since the beginning of the last fiscal year, or any currently proposed transaction, where the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.

Earnings Press Releases

4.23

Review and discuss with management prior to release all earnings press releases of Samson, including the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided by Samson to analysts and rating agencies. This authority may be delegated to a Committee member or to a subcommittee comprised of members of the Committee, which shall report to the full Committee at its next meeting.

Compliance With Law And Regulations

4.24

The Committee shall periodically review with management and the independent auditors any correspondence with, or other action by, regulators or governmental agencies and any employee complaints or published reports that raise concerns regarding the Company’s financial statements, accounting or auditing matters or compliance with the Company’s Code of Business Conduct and Ethics. The Committee shall also meet periodically, and may request to meet separately, with members of management and, if appropriate, the Company’s outside counsel, to review material legal affairs of the Company, including the Company’s compliance with applicable law and listing standards.

In addition to the authority and responsibilities expressly delegated to the Committee in this charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s Constitution. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.

Approved by the Audit Committee
Date: June 30, 2011

Approved by the Board of Directors
Date: June 30, 2011