Sundance Seeks More Eagle Ford Acreage - Sept. 2014

September 10, 2014 Kirk Eggleston

Australian-based Sundance Energy's Managing Director Eric McCrady was cited in a Bloomberg report this week saying the company plans to add 10,000 to 20,000 net acres in the Eagle Ford within 12-months.

Sundance's most recent reported acquisition came in late May of 2014, when the company announced it would purchase 11,000 net acres in Dimmit and Maverick counties for $33-million. The deal added 115 gross (69 net) locations to the company’s Eagle Ford drilling inventory and approximately 200 boe/d in production. Sundance currently has ~19,500 net Eagle Ford acres covering 295 gross (196 net) drilling locations.

The company's Eagle Ford expansion comes at a time when some Eagle Ford operators will likely need to divest their assets to pay down debt. In June, Freeport McMoran completed at $3.1-billion deal with Encana to sell 45,500 net acres in the play. Freeport McMoran officials said a portion of the proceeds would be used to pay down debt.

Sundance Eagle Ford Operations in Second Half of 2014

In July, Sundance officials said 26 gross (20.6 net) Eagle Ford wells were expected to begin production in the second half of the year, pushing the company's production up to 8,000 - 9,000 boe/ d by year's end. According to Bloomberg, McCrady confirmed the company expects to hit that target goal in September and increase output next year.

Sundance Energy Acquires 11,000 Net Eagle Ford Acres for $33-Million

May 27, 2014 Kirk Eggleston

In late May of 2014, Australian-based Sundance Energy announced the acquisition of 11,000 net acres in Dimmit and Maverick counties for $33-million and a four gross Eagle Ford well drilling commitment to the seller. The deal adds 115 gross (69 net) locations to the company's Eagle Ford drilling inventory and approximately 200 boe/d in production. Sundance now has approximately 19,500 net Eagle Ford acres covering 295 gross (196 net) drilling locations.

This acquisition is the company's second strategic move to add Eagle Ford acreage to its portfolio in just over a month's time. In late April 2014, the company announced the completion of a lease acquisition and development agreement for Eagle Ford acreage in McMullen County. That deal added 4,800 net acres and 50 gross locations to the Sundance’s Eagle Ford drilling inventory.

Sundance Building a Core Eagle Ford Operating Area

In late May of 2014, Sundance also announced the sale of its acreage in the DJ Basin in Colorado for $116-million. The company is shifting its assets to build a core operating area in the Eagle Ford, and a portion of the funds from this sale will be re-allocated to the play.

“This sale of a non-core project allows the company to not only crystalise an attractive return on its DJ Basin investment, but provides a significant opportunity to reinvest capital into accelerating growth in our core projects in the Eagle Ford and Mississippian/Woodford.”

— Sundance's Managing Dir., Eric McCrady

undance's most recent acquisition in Dimmit County is for a 60% working interest, and a 30% working interest in the Maverick County acreage. Dimmit County wells are prospective for the Eagle Ford formation, while the Maverick County wells are targeting the Georgetown formation.

“We are very excited to add a second core Eagle Ford area to our development inventory. Dimmit County has seen significant activity and strong results from some of the leading Eagle Ford operators such as Anadarko.”

— McCrady

In the purchase and sale agreement, Sundance secured an option to buy the remaining 40% interest in the Dimmit County acreage, and an additional 20% interest in the Maverick County acreage. Sundance did not disclose any information about the seller. Closing is expected in late June or early July of 2014.

Sundance Energy Completes Eagle Ford Lease Acquisition and Development Agreement

April 23, 2014 Kirk Eggleston

Australian-based Sundance Energy completed its' lease acquisition and development agreement for Eagle Ford acreage in McMullen County in early April 2014.

The deal includes a $10-million up-front payment and two separate earn-out payments of $7.7 million, which are due upon commencement of drilling and payout of the first six wells.

Sundance's Ealge Ford Acreage Acquisition

The acquisition adds 4,800 net acres and 50 gross locations to the Sundance's Eagle Ford drilling inventory. The company's existing acreage position in McMullen County, combined with this acquisition, increase Sundance's McMullen County project area in the Eagle Ford to 13,000 net acres and ~160 gross drilling locations. Company officials say the contiguous acreage block, extended by this acquisition, will allow for long reach laterals that enhance recovery and drilling efficiency resulting in improved economics. As of February 2014, Sundance was operating a two-rig horizontal drilling program to develop its McMullen County project.

Sundance Sale of Williston Basin Phoenix Prospect

In the last quarter of 2013, Sundance racked up $35.5 million from Natural Resource Partners for non-operated working interests in the Williston Basin Phoenix Prospect.

The sale is in-line with the company's strategy to divest non-operated assets, and re-invest capital in operated development activity in the Eagle Ford and other U.S. shale plays. Currently the company has 3,640 net acres in it's Phoenix and Goliath Prospects in the Williston Basin, which it considers non-core, and plans on divesting.