Australian firm doubles Eagle Ford position
Sundance Energy Australia Ltd. is more than doubling its leasehold in the Eagle Ford shale after agreeing to purchase 11,000 net contiguous acres in the South Texas formation from an unidentified seller.
Sundance, based in Norwood, South Australia, is set to acquire 5,500 net acres in Dimmit County and 5,500 net acres in Maverick County-increasing its position in the shale formation to roughly 19,500 net acres.
The agreement calls for Sundance to pay $33 million upfront and commit to drilling four gross Eagle Ford wells. Sundance also has the right to acquire the seller's remaining 40% interest in Dimmit County and 20% working interest in Maverick County for $45 million.
"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," said Eric McCrady, managing director of Sundance.
The acquisition will add roughly 69 net locations to the company's Eagle Ford drilling inventory and an estimated 200 boe/d of production. Sundance also expects to add about 350,000 boe of reserves composed of 55-60% oil.
Wells on the acquired acreage are likely to be drilled with 5,500-ft laterals at costs expected to average less than $6.5 million/well.
McCrady said: "There is significant upside to reserves and returns per well because the lease configuration provides for completed lateral length over 5,500 ft."
The purchase builds on Sundance's 7,336 net acres in McMullen County, Tex. Those assets, acquired in March 2013, include 4.4 net producing wells and produce 700 boe/d. Sundance expects to move one rig to the acquired acreage from McMullen County in the third quarter.
Sundance also has US operations in the Denver-Julesburg basin, the Anadarko basin, and the Williston basin.
The Eagle Ford deal is expected to close by early July.