Page 10 - Sun Resources 2014 Annual Report

The Board of Sun Resources NL (“Sun”
or “the Company”) and Sun’s key
stakeholders have worked together on
our focused strategy to purchase and
retain a material lease position in the
Woodbine Tight Oil Play of East Texas,
otherwise known as the “Eaglebine”.
Through the course of the reporting
period, the Company had worked to
maintain the mineral rights (all horizons)
in over 16,000 net acres of oil and gas
leases. Across Sun’s six separate, but
nearby project areas covering a gross
lease position of over 28,000 acres.
Further, with its latest round of
equity funding (completed August
and November 2013), Sun has now
participated in six ‘proof of-concept’
horizontal Woodbine wells; three in the
Upper Woodbine (‘A’), one in the Middle
REVIEW OF
ACTIVITIES
Woodbine (‘B’) sands, and two laterals
in the Lower Woodbine (‘C’). At the
time of reporting, all six wells had been
successfully drilled and fracced with all
now either on long term production or
continuing with flow-back operations.
In the last few months, the central
region of the Lower Woodbine play has
also been de-risked by Sun’s peers,
especially EOG, but including Encana
and Halcón Resources Corporation
(“Halcón”), in the areas immediately
adjacent to Sun’s Southern Woodbine
Leases. To date, the only outstanding
strategic objective that remains is a
highly competitive, commercial, initial oil
production rate (or IP rate). The best IP
rate achieved so far is the Ellis #1H well
that has confirmed a 90-day IP rate of
150 barrels of oil per day (bopd) from
the Middle Woodbine ‘B’ sands.
Focused strategic interest in
the Woodbine Tight Oil Play
!"
Texas
Woodbine Projects
Eagle Ford Project
Texas
During the second quarter of 2014,
Sun successfully completed its first
operated well; The Jack Howe #1
vertical pilot hole that was drilled to
a final depth of almost 2,600 metres
below ground level. A total of 50
metres of conventional core was
recovered from the well across the
target Lower Woodbine Formation
and oil and gas shows were recorded
while drilling/coring. Also in May 2014,
Sun announced it had reached an
agreement with Ursa Resources Group
II Inc. (Ursa) to jointly explore the Badger
Project; delivering another 5,014 net
acres to Sun’s land bank. This new area
diversifies the portfolio by geographic
area but still meets the criteria of oil-rich
Eagle Ford Shale within Texas.
Figure 1: Sun’s Land Acquisitions, ~21,237 net acres across 8 projects.
8  SUN RESOURCES ANNUAL REPORT 2014