Page 9 - Sun Resources 2014 Annual Report

SUN RESOURCES ANNUAL REPORT 2014 7
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. An initial horizontal well
is planned to commence operations in November 2014
and Sun’s working interest in that well is 50%. At the time
of reporting, another Operator, Clayton Williams, was
flowing-back hydrocarbons, with gas being observed
flaring on site. Oil/liquid rates will be reported once they
are publicly available. However, this project area provides
some diversification to the portfolio while maintaining the
potential to drill wells at less expensive target depths than
the traditional Eagle Ford Shale of South Texas.
Mr Matthew A Battrick
Acting Chief Executive Officer
Perth, Western Australia
At the time of writing, Sun had just participated in the
Davis #1 vertical pilot well operated by Petro-Hunt LLC to
jointly explore and develop an Area of Mutual Interest (AMI)
consisting of approximately 7,832 gross acres in northern
Leon County, Texas. Petro-Hunt is a privately-owned
independent oil and gas company based in Dallas, Texas
and also the largest shareholder in Halcón. Under this
agreement, Sun holds a 25% interest in the AMI and in any
successful wells. The total gross Lower Woodbine Dexter
sand intersected was 39 feet (12 metres). Approximately
8-12 feet (<4 metres) of net sand was interpreted on the
wireline logs of gross Dexter sands in the Lower Woodbine
Formation, with only minor hydrocarbon shows recorded.
The sands were developed with a laminated character and
were interpreted to be too thin to warrant being drilled and
completed as a lateral well at this location. The well has
since been plugged and abandoned. This outcome, while
not successful, confirmed Sun’s policy to drill a vertical pilot
test well ahead of attempting an initial horizontal well. This
reduces the risk of delivering a sub-commercial lateral well.
Maintaining material land position while focussing
on delivering commercial production from the
Woodbine Tight Oil Play