Value Microcaps Junior Energy

[Bobwins]

Texon/Sundance published merger documents. Says Texon shareholders will get 1/2 share of Sundance for each Txn share plus 2 shares of Talon for every 5 shares of Texon they hold at the time of the merger.

Biggest reason for the merger appears to be the oversized drilling commitments that Texon would have to fulfill to hold the acreage. The drill budget would have to be close to 100million and Texon couldn't finance that amount. Sundance has the cash and a line of credit to back them up.

Proforma drilling plans call for 12 gross/10.8 net Eagle Ford shale wells in 2013 for the merged company. If the wells come in at 500boepd each, that would add over 5,000boepd to Sundance's production profile. With depletion, they should still end the year well over 3,500boepd, a huge increase from 2012. The total wells available to drill in the EFS is 68 so lots of years of drilling ahead for Sundance.

I think the deadlines and cash requirements will scare off many wouldbe suitors. I am hoping Sundance can close this deal and keep on drilling till the cows come home!