Page 14 - Sun Resources Annual Report 2013

Amerril Project: Regional Lower Woodbine
Oil Play Developments (Sun 50%WI)
In recent months, 4 oil companies (Halcón, Clayton
Williams, EOG and Silver Oak) have cumulatively
announced oil flow results of 10 horizontal wells each
drilled into the same stratigraphic horizon as Sun’s Seale
#1H and T.Keeling #1H horizontal wells (being horizontal
fracced wells into the horizon labelled by these oil players
and various oil industry participants as either the “Eagle
Ford”, “Dexter”, “Manness Shale”, “Lower Woodbine” or the
“Woodbine C”). These various names can be confusing but
the stratigraphic horizon being drilled is the same. Sun uses
the term “Lower Woodbine” or the “Woodbine C” and these
terms refer to the same stratigraphic interval.
These 10 horizontal wells into the Lower Woodbine have
achieved excellent oil flow results, with 30 day IPs of at least
609 Boepd and up to 835 Boepd and 90 day oil production
per well of up to 50,000 Bo. 7 of these 10 horizontal wells in
the Lower Woodbine have been reported by Halcón.
All of these horizontal wells have been drilled into the Lower
Woodbine, in Brazos County, Texas (south-west along strike
of Sun’s Seale #1H and T. Keeling #1H wells). Halcón’s
7 horizontal wells in the Lower Woodbine are reported
by them as resulting in average cumulative production of
40,000 Bo per well over the first 90 days of oil flow, with
Halcón’s reported type curve showing an estimated gross
EURs per well of 371,000 Boe and IRRs exceeding 100% at
current oil pricing.
Extensive discussions with frac design consultants and
various frac completion contractors have determined that
frac design and frac completion are critical to successful
exploitation of the Woodbine “C” horizon. A consensus
view as to the “recipe” of an optimal frac design for a Lower
Woodbine horizontal well is rapidly taking shape, though
much work remains to be done before a settled set of frac
design parameters is firmly established. This progression in
the final frac design is also what occurred in the Eagle Ford
Shale in locations such as Karnes, Live Oak and Atascosa
counties in Texas. What is abundantly clear however is
that oil flow results from later horizontal wells are materially
superior to earlier wells as more appropriate frac designs
are used and superior frac completions occur.
Recognition of the Lower Woodbine play, rising lease
activity and prices of acres containing the play and
drilling of Lower Woodbine horizontal wells has rapidly
accelerated over the last few months, as these horizontal
well results become more widely known and understood.
Sun believes these recently reported horizontal well results
into the Woodbine “C” achieved by other oil companies
has significantly de-risked the Lower Woodbine play from a
financing and investment perspective (both debt and equity).
REVIEW OF ACTIVITIES
SUN RESOURCES ANNUAL REPORT 2013 12