Sundance Energy (SDCJF)

[Bobwins]

Sundance announced last night in Australia that they had added a few acres to their Wattenberg acreage. They paid 14 million cash. Sounds like it is near their existing Wattenberg land. Sundance is only drilling vertical wells there now, which are very cheap and quick to drill and complete. The well start out in the 100bpd range and drop back to 35 to 50bpd over time. Very economic due to the low cost of drilling.

Sundance does have plans to drill horizontally in the area but may need to pool land with nearby neighbors to make the best use of the land due to the long horizontals that are typical.

Sundance still has most of their cash from the sale of South Antelope. They reported 163million before this purchase. They could be waiting to see if the Texon merger closes before making another big move. Texon deal could get other bidders.

If they can close the deal, it will be a good deal for Sundance. They bought prime oily Eagle Ford Shale land for less than 10,000 per acres, which is about 1/3 the going value. The need to drill to hold leases was a big negative and one of the reasons Texon had to sell. The leases are coming due and the drill program will have to be aggressive to hold the acreage.