Page 14 - Sun Resources 2014 Annual Report

Beeler Oil Project: Targeting
Upper & Middle Woodbine (nee
Richland, Sun 13.5-16.7%WI)
The Beeler Oil Project comprises1,398 gross acres, within
three production units; CW Brown #1H, John Beeler #1H
and Ellis #1H. This project comprised Richland Resources,
Steadfast Resources LLC, Amerril and Sun and it involved
a program of horizontal drilling and multi-stage fraccing of
the Upper Woodbine sands (or Woodbine ‘A’ or ‘Harris’
sands). Drilling operations commenced on August 2012
and culminated in the working interest parties ultimately
agreeing to drill and frac three horizontal wells, plus one
vertical well in the project area.
The Beeler #1H well was completed with a 16-stage
frac along a 6,100 feet lateral in the Woodbine A. Once
in production, this well was renamed CW Brown #1H.
The second well, John Beeler #1H which also targeted
the Woodbine A sands, was completed with a 7,300
feet lateral and a 31-stage frac. The John Beeler #2V
well immediately followed the John Beeler #1H well and
targeted the entire prospective section, from the shallower
Sub-Clarksville sand as well as the entire Woodbine
section and underlying Buda formation. Although oil and
gas shows were reported in the well, and knowing this
well is offset by successful horizontal wells, none of the six
fracced intervals in this well flowed oil or gas. The well was
subsequently suspended pending a future decision on its
use, possibly as a new horizontal well into the Middle or
Lower Woodbine.
The third and final horizontal well in the project area
was Ellis #1H and it was chosen for a Woodbine ‘B’ (or
“Lewisville”) sand lateral after reviewing the logs from
the pilot hole. The Ellis #1H well completed a 7,700-foot
lateral with a 19-stage frac. All wells were flowed back via
natural flow, gas lift and rod pump, with the Ellis #1H well
delivering the best “single day” initial production rate, or IP
rate, of approximately 250 bopd. Oil production continues
under the new operatorship of Amerril with all three
horizontal Woodbine wells now producing oil with either a
jet pump or a rod pump installed.
Production continued during the reporting period from the
three lateral wells: Ellis #1H, CW Brown #1H and John
Beeler #1H. Ellis #1H continues to be the best performer
with daily production rates varying between 80-140 bopd
(gross 100%WI). During the December 2013 Quarter, the
Operator, Amerril, conducted work over operations at the
other two lateral Woodbine wells: CW Brown and John
Beeler #1H in an attempt to improve well productivity.
No drilling activity occurred in the project area during the
reporting period.
Southern Woodbine Oil Projects:
(Sun 50%WI)
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 during the reporting period, as these
horizontal well results become more widely known and
understood. Sun believes recently reported horizontal well
results by EOG Resources into the Woodbine “C” (and
by other oil companies) have significantly de-risked the
Lower Woodbine play from a financing and investment
perspective (both debt and equity).
Sun entered into a commercial agreement with Amerril
in the second half of 2012 to purchase almost 6,000 net
acres of oil and gas leases within what was called the
“Amerril Oil Project”. The leases which were clustered
in four separate project areas have collectively become
known as the Southern Woodbine Projects: SW Leona
(adjacent to Normangee) being the largest and most
significant; Centerville (adjacent to the Delta Project)
Eunice and Freestone, two outlying project areas with
small lease areas to the east of the core fairway and
having strategically less Eaglebine potential.
De-risking the Eaglebine oil fairway
to unlock value through drilling and
offset operator activity
REVIEW OF ACTIVITIES
12  SUN RESOURCES ANNUAL REPORT 2014