For Immediate Release
General Manager
The Company Announcements Office
Australian Securities Exchange
Development Update
US based oil and gas developer Sundance Energy Australia Limited (ASX: SEA) provides the following development update.
Phoenix Prospect
Chase 21-30H (Sundance owns 100%)
This well was fracture stimulated on 13 and 14 November. However, because of downhole mechanical difficulties, it is judged that only one of the six segments of the horizontal lateral was stimulated. Despite this, the fracture stimulation was encouraging with the well having produced 1,651 barrels of oil and 2,269 barrels of water (20% of the frac load) in the last nine days.
The frac was designed to pump 747,000 pounds of sand in six separate stages. Due to the downhole mechanical problem, 470,000 pounds of sand was pumped in a single stage, and it is believed that only the heel of the string was treated.
The Company will make an assessment on when to frac the untreated sections of the Chase lateral at some point in the future when prevailing market circumstances warrant. Sundance believes it is prudent in the current environment to defer further development of the Chase well until market conditions improve and the Company is able to generate higher returns for its shareholders.
South Antelope Prospect: Helis Campaign Deferral
Helis Oil & Gas Company, the operator of the South Antelope Prospect, has announced that, following completion of the Dodge 4-6H well for which it is rigging up now (Sundance has a 5.5% Working Interest in the Dodge) it intends to defer drilling operations on this prospect until at least May of 2009. Helis indicated that its decision was made in light of a number of factors including the continuing uncertainties in the commodity and broader markets, as well as the escalating price of operations (services and drilling) in North Dakota, especially during the winter months when operating costs are higher. Helis said that it would review the overall situation early in the second calendar quarter next year at which point the ownership group will make a decision as to when to recommence drilling on the prospect.
Sundance supports this decision as being in the best long-term interest of its shareholders, and in line with the Company?s approach of measured growth and capital preservation in the current market environment.
Buffalo Creek Prospect (Sundance Owns ~ 45%)
In order to further explore the economics of these shallow New Albany Shale wells, Sundance successfully fracture stimulated the Abner 1-19H on 23 November, with 186,000 pounds of sand and 8,045 barrels of water.
The Abner 1-19H will be allowed to flow back for the next several months at which point the Company expects to have enough data to determine the impact of the fracture stimulation on the dewatering process and to make a decision on the next developmental step on this prospect.
It is the Company?s current assessment that these wells are non-economic without stimulation which is proving to be the case throughout the basin. Hence, in its ongoing effort to determine the best, most cost effective way to exploit this prospective area,
Sundance has shut in the other three pilot wells on the prospect, the Hill Farms 1-3H, the Hill Farms 1-10H and the Abner 2-19H, and will await the results of the Abner 1-19H stimulation before proceeding with further development.
Goliath Prospect
Viall 30-1 (Sundance Owns ~ 3%)
On 13 November, 2008, Evertson spudded this 14,400 foot (4,389 metre) deep vertical test well which is designed to target the Stonewall, Red River and Winnipeg formations on a prospect identified by the recent 3D seismic program shot at Goliath.
Cyclone Rig # 25 is currently drilling ahead at 8,626 feet (2,629 metres).
Following the Viall, the Company is anticipating the spud of the first of as many as four Bakken wells on this prospect by RTA. As previously announced, the Company will be 100% carried in these wells by RTA (see the Company?s ASX Release dated 10 October 2008).
For further advice on this release, please contact:
Kip Hunter Warrick Hazeldine
General Counsel/ Purple Communications
Director of Communications Investor Relations
US based Tel:(+61 8 9485 1254)
Tel: (303-543-5709)
About Sundance Energy Australia Limited
Sundance Energy Australia Ltd (ASX: SEA) is an Adelaide-based, independent energy exploration Company, with a wholly owned US subsidiary, Sundance Energy, Inc., located in Colorado, USA. The Company is developing projects in the US and Australia. In the US, Sundance is primarily focused on large, repeatable resource plays where it develops and produces oil and natural gas reserves from unconventional formations.
A comprehensive overview of the Company can be found on the Company?s website at www.sundanceenergy.com.au.
Sundance Energy Australia Limited ABN 76 112 202 883
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