The company intends to spend A$4.45 million on the additional equity, $1.13 million on development costs and $253,880 for the issue expenses, by releasing up to nearly 33.5 million fully paid ordinary shares at 18 cents each.
This announcement follows news earlier this month that Sun Resources was buying 7.5% interest in the project from US private firm Davis Gulf Coast Oil.
Sun will hold a 20% interest in the producing Flour Bluff and Pita Island fields and a 24.167% interest of the East Flour Bluff field.
There are two other Perth-based Flour Bluff partners - Victoria Petroleum and Aurora Oil & Gas.
Aurora also now holds a 20% interest in the producing Flour Bluff and Pita Island fields and a 24.167% interest of the East Flour Bluff field. VicPet retains its original 12.5% interest in the project, as well as a 16.667% interest in East Flour Bluff.
Sun says significant gas, or 212 billion cubic feet of recoverable gas, remains in the old giant gas field near Corpus Christi, Gulf Coast. It said this gas resource was valued at more than US$2.4 billion dollars.
Sun Resources director and company secretary AP Woods says the joint venture is on schedule to ramp up production to 40 million cubic feet per day by February 2008. He said this rate should be sustainable for the following six to eight years.
A new Phase 2 program from January next year to May 2007 will involve drilling nine wells to bring a further 41 billion cubic feet of the 3P reserves into production, he said.
“Production of 20 million cubic feet per day and upwards to 30 million cubic feet is targeted if fraccing of reservoirs are optimised and high gas flows results,” Woods said.
