Denver, Colorado-based oil and gas exploration and production company TH McElvain Oil & Gas Limited Partnership is making its first foray into Australian petroleum exploration, taking a stake in the Kitson-1 well.

Currently being drilled in PEL 88 about 200km north-east of Moomba, Kitson is the first well in Sundance’s Cooper Basin drilling program. It is also the first well to be drilled by the company since its successful capital raising and ASX listing last month.

Sundance is earning a 45% interest in the well, which spudded on Wednesday, and now McElvain has agreed to take out 5% of Sundance’s interest.

Under the farmout agreement, McElvain will contribute towards Sundance’s share of the cost of drilling Kitson-1 well, with McElvain only earning its 5% interest if the well is completed for production. Sundance’s interest would reduce to 40% as a result.

Since its inception in the 1920s, McElvain’s primary areas of interest have included the states of Texas, New Mexico, Colorado, Utah and Wyoming. Sundance holds 212 US oil and gas leases, giving it rights to more than 5320 acres in the Arkoma Basin province of Oklahoma, near the town of Gerty.

“Sundance views this relationship with McElvain as a boon to our Company’s long-term prospects,” said Sundance managing director Jayme A McCoy.

“McElvain’s market profile in the US promises numerous additional cooperative opportunities between the two companies to identify and develop future oil and gas prospects,” McCoy said.

“Indeed, Sundance and McElvain are currently negotiating for an additional joint venture agreement which we anticipate will be concluded in the next few days.”

At 6am today (Australian Central Standard Time) Kitson-1 was at 625 metres preparing to drill out cement and drill ahead below 95/8 inch casing set at 623 metres. Planned total depth is 2205 metres.