For immediate release
Strong proven US reserves for Sundance
Highlights:
? Proven Reserves (1P) of 3,411 Mboe, being 2.65 million barrels of oil and 4..549 Bcf of gas confirmed by Ryder Scott Report - based on US Energy Information Administration (EIA) oil and gas price forecasts.
? Confirms significant economic value of underlying current assets despite downturn in global energy assets valuations.
? Establishes a PV10 (pre tax future net cash flows discounted at 10%) ranging from US$20.1 million (AU$28.8 million) to US$63.03 million (AU$90.31 million).
? Review supports the Company?s assessment that its 2P and 3P reserves are significant.
US focussed oil and gas developer Sundance Energy Limited (ASX: SEA) is pleased to report strong proven oil and gas reserves, reaffirming the value of its US asset base and its positioning to capitalise on a rebound in energy prices.
Sundance recently commissioned Ryder Scott - one of the world?s leading reserve engineering firms - to determine the volumes and related values of its hydrocarbon reserves based on two pricing models.
Ryder Scott?s analysis evaluated 49 gross well locations, or 27% of the 180 potential gross well sites identified by the Company in its Phoenix and South Antelope Prospects based on 320 acre spacing.
Under a conservatively escalated EIA pricing scenario, Ryder Scott found that Sundance?s proven reserves are 2,652,795 barrels of oil and 4.549 Bcf (billion cubic feet) of gas amounting to 3,411 Mboe (thousands of barrels of oil equivalent.) See www.eia.doe.gov
Under a flat price scenario which assumed a constant price for the life of the well of US$50 per barrel of oil and US$4.50 per Mcf of gas, Ryder Scott determined Sundance?s current proven reserves are 998,560 barrels of oil and 1.834 Bcf of gas, amounting to 1,304 Mboe.
Sundance Managing Director Jayme McCoy said the results confirmed the quality and economic value of Sundance?s acreage under either pricing scenario.
?We believe this is an indication of the significant increase in the value of the Company?s underlying assets, particularly considering asset transaction multiples that continue to exist in the current market and in areas specific to Sundance?s acreage,? Mr McCoy said.
?This report establishes that, assuming a very conservative rebound in oil prices over the coming several years, we have effectively replaced the reserves sold at the end of 2007 via the Ashland transaction.
?Further, given that this reserve report essentially analysed only about 27% of just two of our US prospects, we believe it is a strong, positive value indicator for our shareholders.
?More compelling perhaps are Ryder Scott?s conclusions concerning Sundance?s current pre tax future net cash flows, which were found to be significant under either price scenario.?
Using flat pricing, Sundance?s current PV10 is US$20.1 million (AU$28.8 million) and, applying the escalated model, it increases to US$63.03 million (AU$90.31 million).
?We believe this to be a further indication of the strength of the Company?s asset position despite conservative pricing mechanisms,? Mr McCoy said.
?It confirms our view that Sundance has advanced prospects in the most sought after addresses in the US, and is in a prime position to benefit from a rebound in energy prices.?
While Ryder Scott?s study was limited to 1P reserves, based upon its conclusions, the Company anticipates that its 2P and 3P reserve upside is substantial.
The Ryder Scott?s report did not consider any existing or future behind-the-pipe, serendipitous reserve potential and was not asked to evaluate the reserve potential of the Company?s other less advanced prospects. However, the Company clearly places some material upside value on these prospects.
About Ryder Scott
Ryder Scott evaluates oil and gas properties and independently certifies petroleum reserve quantities in the U.S. and internationally. Founded in 1937, Ryder Scott is one of the largest, oldest and most respected reservoir-evaluation consulting firms in the industry (see: www.ryderscott.com).
For further information, please contact:
United States Australia
Jayme McCoy Mike Hannell
Managing Director Chairman
Tel: (303-543-5707) Tel: (+61 8 8363 0388)
Kip Hunter Warrick Hazeldine
General Counsel/ Purple Communications
Director of Communications Investor Relations
Tel: (303-543-5709) Tel: (+61 8 6314 6300)
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.
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