Sundance Energy Australia Limited plans to raise up to A$7.75 million to explore onshore for oil and gas in the US state of Oklahoma, and Australia’s Cooper Basin in South Australia and Queensland.
Sundance Energy is proposing at least eight exploration wells in Oklahoma during the current calendar year. Another well is proposed for 2005 in the Cooper Basin.
“We intend to capitalise on the current and anticipated continuing strength of the global oil and gas markets,” Sundance Energy chairman Charles Binks said.
“With supplies diminishing and global demand increasing, oil and gas prices are expected to remain high for the foreseeable future. Our twin asset base position will enable Sundance Energy to explore both near production oil and gas prospects in the proven province of Oklahoma while exploring its potentially larger company-making assets in the Cooper Basin.”
Sundance Energy is offering up to 38.75 million new shares at an issue price of A$0.20 each to raise up to A$7.75 million – also the minimum subscription level.
The 0ffer is fully underwritten by Euroz Securities Limited and opens on 11 April 2005 and closes on 15 April 2005.
The company hopes to list on the ASX towards the end of April. On listing, Sundance will have a total of 78.75 million shares on issue and be capitalised at listing at more than A$15 million.
Sundance says it will focus on conventional and unconventional oil and gas development and exploration, including basin-centred gas, tight gas sands, structural and stratigraphic oil and natural gas, coalbed methane, biogenic gas and fractured shale gas.
In Australia, Sundance Energy is acquiring interests in five licences in the Cooper Basin, including two in South Australia and three in Queensland.
These comprise a 45% stake in PEL 88 and a 46.67% interest in PEL 100 in South Australia. In Queensland, the company has a 100% interest in applications for ATPs 616P and 661P, and a 90% interest in ATP 636P.
“The areas cover a total of about 10,117 square kilometres of petroleum acreage but our focus will be on selective drilling of oil targets within these blocks,” Binks said.
“Our licences there are the beneficiaries of significant vintage seismic, and reprocessing of some of this data has already identified 45 prospects. We expect to drill our first Cooper Basin well, Kitson-1, before the end of May.”
The joint venture participants in Kitson-1 are are Sundance Energy Australia Limited (45%), Cooper Energy Limited (30%), Enterprise Energy NL (10%), Victoria Petroleum NL (10%) and Liberty Petroleum (Inc.) (5%).
A further two wells on the Australian blocks are already scheduled for drilling in 2006.
In the US, Sundance holds 212 oil and gas leases, giving it rights to more than 5,320 acres in the Arkoma Basin province of Oklahoma, near the town of Gerty.
“Our drilling program in this area will be aggressive and focus on natural gas wells targeting shallow, lower risk blanket formations of 7,500 feet in depth or less,” Binks said.
“The targets are close to readily accessible existing pipeline infrastructure and any gas commercialised will sell into a market which pays considerably higher margins for its gas than does the domestic Australian gas market. US gas prices are at, or near, all-time highs and natural gas production there can be profitably hedged for long periods of time, ensuring stable cash flows.
“We believe Oklahoma, while a proven province, contains an estimated large undeveloped natural gas resource base and the intensity of our maiden exploration there reflects what we believe is significant petroleum upside in this state.”
Sundance has offices in Adelaide and Boulder, Colorado, USA.
