Recent price: 2.89$
P/E Ratio: 5.58
3 Months Target Price: 4$
Company Description
Samson Oil & Gas Limited is engaged in exploration and development of oil and natural gas properties in the United States. As of June 30, 2010, it had five material producing oil and gas properties. It does not operate any of its material, producing properties; rather, it owns a working interest in each property and has entered into operating agreements with third parties, under which the oil and gas are produced and sold. In June 2010, it agreed to sell 24,166 acres of undeveloped oil and gas leases in Goshen County, Wyoming to Chesapeake Energy Corporation. As of June 30, 2010, the Company’s properties included Jonah Field, Green River Basin, Wyoming; Look Out Wash Field, Green River Basin, Wyoming; State GC Oil and Gas Field, New Mexico; North Stockyard, Williston Basin, North Dakota, and Davis Bintliff, Brazoria County, Texas. It has one wholly owned subsidiary, Samson Oil and Gas USA, Inc.
Confidence Margins
Strong resistance $4.75 (+64%)
Light resistance $4.12 (+43%)
Light support $2.62 (-9%)
Strong support $2.11 (-27%)
Recommendation
As Samson Oil and Gas Limited is in a continued uptrend, this Australian company is very undervalued from a fundamental standpoint. Investors taking advantage of the current break the market is taking relative to shares of Samson Oil & Gas will reap good returns by the end of Q3 2011.
Entry strategy
For the cautious investor:
Buy the stock for 3.00$ or less.
For the risk-taking trader:
The October 2011 5$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 35$ per contract.
Exit Strategy
For the cautious investor:
Sell when the stock reaches 4.00$, or keep it until 4.75$ if you are more bullish in your own analysis.
For the risk-taking trader:
The contracts should be kept until the underlying reaches around 4.00$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.
