32 Beulah Road,
Norwood.
SA 5067 ACN
112 202 883
Telephone:
+61 8 8363 0388 Facsimile: +61 8 8271 0975
www.sundanceenergy.com.au
18 December 2007
Sundance Closes Drilling Deal for Phoenix
Prospect
US-focused oil and gas developer Sundance Energy
Australia (ASX:SEA) is pleased to announce it has signed a farm-in agreement
with Helis Oil and Gas Company L.L.C., covering part of its 100% owned Phoenix Prospect
in North Dakota.
The “Exchange and Participation Agreement”
will see a two year drilling program commence at the Phoenix Prospect within
the first quarter of 2008.
The Agreement includes a trade of acreage and cash
consideration to Sundance, and will establish Helis as operator of an Area of
Mutual Interest (AMI) along the western side of the prospect area. Helis is a well
established US-based exploration and production company, with operations in the onshore
and offshore Gulf of Mexico and in the Northern Rockies.
Sundance Managing Director Jayme McCoy said,
”This agreement allows Sundance and its shareholders to leverage upon the
operating expertise of Helis, while retaining a strong interest in its high
potential oil and gas assets.”
“We are very excited about this development as
it realizes strong asset value to
our shareholders, and formalizes an important relationship for the
Company,” Mr McCoy said.
“Helis is a tremendous operator, and we are
expecting very exciting results from our upcoming
drilling program with them in this
prospect.
“Following the sale of our minority stake in two
of our assets earlier this month, we are debt free and in an extremely strong cash
position. Our focus now is to drive forward with exploration across our remaining
projects in which we retain a much higher level of ownership,” Mr McCoy
said.
Helis has contracted for a drilling rig for
a two year period at Phoenix.
Sundance will have the right to participate in every well drilled by Helis in
the AMI during that period and
beyond.
As part of the agreement, Sundance will retain a high
working interest in the assets. The first two wells drilled by Helis in 2008,
will be in sections in which Sundance owns approximately 45-47%. Helis is
scheduled to spud the first of those wells before the end of the first quarter
of 2008. The Company’s interests will vary between 7% and 50% in the
acreage the two companies own within
the AMI dependent upon the spacing
unit being drilled.
Sundance retains a 100% interest in the remaining acreage
in the Phoenix Prospect, and will commence its first internally operated well
program in the prospect in the
second quarter of 2008.
“The knowledge and experience gained from working
with Helis as operator will directly benefit the Company’s 2008 drilling
program on the rest of this prospect in we have a 100% ownership interest.”
“It has always been Sundance’s strategy to
work with the most qualified operating
teams in order to deliver the best value to our owners, and we feel confident
that this transaction accomplishes that,” Mr McCoy said.
The agreement follows Sundance’s announcement
early in December regarding the successful sale of two of its asset interests
to Antero Resources. Sundance sold its minority stake in the MB prospect in Montana, and the Ashland
prospect in Oklahoma,
for more than US$44 million.
Phoenix Prospect
The Phoenix Prospect is located in the centre of the Williston Basin
in McKenzie County, North Dakota, USA.
At the time of its acquisition, the Phoenix Prospect was approximately
12,000 acres.
Today it is comprised of approximately 15,000 acres with an additional 5,700
acres pending governmental approval.
The northwest corner of the prospect is located
immediately southeast of the Blue Buttes Unit, a Mission Canyon producing field, operated by Hess Corporation. This prospect’s
primary target formation is the
oil-bearing Bakken Shale; secondary
target horizons include the
oil-bearing Mission
Canyon, Nisku, Duperow and Red River formations. Since the acquisition of the
Phoenix Prospect in early 2007, the area surrounding it has seen increased
exploration activity in the Bakken formation by operators such as Continental
Resources, Conoco Phillips, Headington
Oil and Gas, Hess Corporation and Helis. The preliminary results from these
wells have been very encouraging with initial production levels at or above accepted
type curve for the prospect area.
Helis has already drilled and
completed the Levang 3-22H, a
horizontal Bakken well in which Sundance has a working
interest of approximately 3.28% (see the Company’s web site and recent
Annual and Quarterly Activities Reports). The Levang
well is sited adjacent to sections in which Sundance is the primary mineral rights owner (which sections are included in the agreement),
and included a core of the Bakken shale as well as an extensive suite of logs. The important science produced from this
well will support the Company’s ongoing geological and geophysical
studies in and around this prospect area, and will help it and Helis to
evaluate future drill sites and design
appropriate drilling and completion techniques
to maximize well performance in the prospect area.
Additionally, Helis has also
drilled, and is in the process of completing, the Linseth 4-8H well, another
horizontal Bakken well in which Sundance does not own an interest.
The agreement was executed on 13, December. It sets
forth an effective date of 15 November 2007, and a final Closing Date of 19 December.
For more information,
Jayme McCoy,
Managing Director, US based (303-543-5707).
Warrick
Hazeldine, Purple Communications, (08) 9485 1254 or 0417 944 616.
About Sundance Energy Australia
Limited
Sundance Energy Australia Ltd
(ASX:SEA) is an Adelaide-based, independent energy exploration company, with
two wholly owned US subsidiaries, Sundance Energy, Inc. and Sundance Energy
Indian, Inc., both 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.
In the US, Sundance has ownership interests
in five oil and gas projects comprising more than 68,000 highly prospective
acres. In Australia,
Sundance owns acreage in the Cooper/Eromanga Basin of Australia totalling approximately 1,140,000
acres.
A comprehensive overview of the
Company can be found on the Company’s website at www.sundanceenergy.com.au.
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