Adelaide, Nov 9, 2006 AEST (ABN Newswire) - Australia's Sundance Energy Limited has added its first oil production in the United States to its current gas output there under a A$1.2 million well and acreage acquisition announced today.
Sundance has acquired a 100% interest in the Calf Woman-1 well in North Dakota. The well is currently producing at 25-30 barrels of oil per day (BOPD).
The Australian company is, however, expecting to rapidly add to its oil production profile in coming weeks from the current drilling of a trilateral oil development well in the Goliath Prospect, just 80 kilometres to the northwest of Calf Woman-1.
Sundance - which in August secured a A$50 million credit facility with Macquarie Bank Limited - already produces gas from fields in Oklahoma and has other gas and oil exploration projects in Montana and Indiana and in Australia's Cooper/Eromanga Basin.
"We have always viewed the United States market as offering significant and cost competitive exploration, development and acquisition potential in both oil and gas," Sundance's Managing Director, Mr Jayme McCoy, said today.
"While our initial focus has been on gas, today's milestone gives us exposure to oil production in line with our growth objectives, offering strong exploration upside for further commercial oil projects," Mr McCoy said.
Included in the acquisition is 12,000 leasehold acres surrounding Calf Woman-1 in the Williston Basin of North Dakota. The consideration paid by Sundance to the seller for the assets is 3.75 million restricted ordinary shares of the Company, worth around A$1.2 million on current market value.
The asset is close to the Blue Buttes Unit operated by Amerada Hess, and the Elm Coulee field which, since June of 2000, has produced in excess of 33 million barrels of oil and 19 billion cubic feet of gas from more than 345 horizontal Bakken wells.
Calf Woman -1's production is from the Mission Canyon formation at approximately 9,500 feet (2,900 metres). Cumulative production from April 2005, to October 2006, was 11,000 barrels with the potential for +50,000 barrels of remaining oil reserves.
Mr McCoy said Sundance would commence an aggressive lease acquisition program early in 2007 to expand the play, followed by a 3D seismic program in order to identify potential drill sites for late next year.
Contact
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
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