Oh what could have been as we DID have the land KIND OF and now have nothing but 100 million in losses lol
Sundance Energy, well known for asset dealing in its portfolio, has reshuffled its shale interests in the US, selling acreage in one basin in Colorado for $US116 million, while adding ground in the Eagle Ford region in Texas for $US33 million in cash plus funding for drilling.
In twin announcements released on Monday, Sundance managing director Eric McCrady said the sale of the acreage in the Wattenberg field in the Denver-Julesburg basin, which was a non-core project, allowed Sundance to make an attractive return on its investment, as well as providing the opportunity to accelerate growth in the Australian-listed company's core area.
Sundance shares rose as much as 5 per cent to $1.045 in early trading on Monday.
The binding sale of the assets, which produced about 567 barrels of oil equivalent a day in the March quarter, "is highly value accretive for the company and compares favourably to recent similar transactions in the DJ Basin," the company said, adding that most of the tax impact of the deal would be deferred. The assets were acquired by a private equity-backed oil and gas player focusing in that region.
"The sale of the DJ Basin assets accelerates our shift towards reinvesting capital into our core company operated projects," said Mr McCrady, who has a track record in M&A, having spent six years screening energy acquisition targets for Denber-based property mogul Pat Broe.
"This strategy will enable Sundance to focus its growth in the Eagle Ford and Mississippian/Woodford, two of the highest return onshore US resource plays."
Some 5500 of the net acres being acquired by Sundance lie in Dimmit County in Texas, which is prospective for the Eagle Ford shale play, while a further 5500 net ares lie in Maverick County, partly targeting a different shale formation known as Georgetown. Sundance has also secured an option to buy the remaining 40 per cent interest in the Dimmit County acreage, and an additional 20 per cent interest in the Maverick County acreage at a pre-negotiated price.
Sundance said the acquisition adds about 200 boe per day to production and increases its Eagle Ford position to about 19,500 net acres. It didn't identify the seller.
In addition to the $US33 million up-front payment, Sundance has committed to drilling four wells in the Eagle Ford. It will move one of its drill-rigs from another area in Texas to the acquired acreage in the September quarter but said it wouldn't updated its 2014 capex budget or production forecast.
Mr McCrady said the deal added a second core Eagle Ford area to Sundance's development inventory.
"Dimmit County has seen significant activity and strong results from some of the leading Eagle Ford operators such as Anadarko," he said.
