Page 15 - Sun Resources Annual Report 2013

Amerril Oil Project: SW Leona Area -
Targeting Lower Woodbine Potential
Sun Resources announced in FY2011-12 that it had
entered into a Sale and Purchase Agreement with Amerril
Energy LLC to purchase a 50% working interest and
37.5% net revenue interest in approximately 12,000
acres of oil and gas leases (approximately 6,000 net
acres). A key Acquisition term (subsequently amended
by Sun and Amerril) included a purchase consideration
of US$5,000,000 cash and 200,000,000 fully paid
ordinary shares in Sun at A$0.05 per share. The Company
completed its due diligence on a total of 12,293 gross
acres of oil and gas leases and on 21 May 2012
announced it had secured an undivided 2.5% WI (1.875%
NRI) in exchange for the payment of US$768,313.
Subsequently, Sun advised (30 July 2012) that it had
reached agreement with Amerril to amend the binding
Sale and Purchase Agreement (SPA). Amerril agreed to
exchange the balance of the cash consideration to be paid
US$4,597,953 for 91,959,077 shares in Sun at a deemed
price of 5 cents each. In addition, the settlement date
under the SPA was extended to 15 September 2012. This
amendment to the SPA received shareholder approval
on 12 September 2012, making Amerril Sun’s largest
shareholder at that time with 291,959,077, following the
completion of the purchase of a 50%WI in the 12,293
acres. Sun’s total net acreage position in the Amerril Oil
Project is currently 5,989 acres.
Subsequent to shareholder approval of the amended
SPA, on or about 8 November 2012, the operator, Amerril
Energy LLC, commenced a multi-well drilling program in
the “SW Leona” area of the Amerril Oil Project leasehold.
The Seale #1 vertical well was the first well to be drilled,
logged and sampled as a ‘pilot hole’, then cased for a
later vertical fraccing and completion program; targeting
the Sub-Clarksville and Woodbine sequences, as well as
the deeper Buda-Georgetown and Glen Rose Formations.
On 22 November 2012, the Seale #1 vertical well had
reached a [[deeper] final TD and measured depth (MD)]
of 9,938 feet in the Glen Rose Formation and a complete
set of wireline logs was run. The logs identified potential
hydrocarbon pay in multiple, stacked formations: namely
the Sub-Clarksville; the Woodbine, and the Glen Rose
Formations. The Seale #1 vertical well was cased for
future fraccing and ‘multi-zone’ production.
REVIEW OF ACTIVITIES 13