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DENVER, Jan. 31 (Korea Bizwire) — Sundance Energy Australia Limited (ASX:SEA) (NASDAQ:SNDE) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford in South Texas, estimates its 2017 capital expenditures will range between $80 and $88 million. Furthermore, the Company’s daily production rate for the full year of 2016 and fourth quarter was approximately 6,400 and 7,900 barrels of oil equivalent per day (BOED) respectively.
2016 Full Year & Q4 Capital Expenditures
During 2016, the Company had total capital expenditures of $84 million, of which it spent $43 million on drilling and completions, $14 million on facilities and field infrastructure projects, $23 million on acquisitions and $4 million on leasing. Of this total $19 million was expended in the fourth quarter. These expenditures were funded with internally generated cash flow, proceeds from the equity offering in mid-2016 and the $7 million received from assets divested in the fourth quarter.
2016 Completed Wells
| Well | County | GPI (feet) | Prop Mass / Lat Ft [lb/ft] |
Peak Rate, boed | IP90, boed |
| Tocquigny H 5TA | Dimmit | 6,555 | 2,051 | 534 | 270 |
| Tocquigny H 6TA | Dimmit | 8,358 | 2,071 | 477 | 286 |
| Tocquigny H 9HF | Dimmit | 9,665 | 2,161 | 560 | 450 |
| Tyler Ranch EFS 3H | McMullen | 5,933 | 2,403 | 790 | 473 |
| Tyler Ranch EFS 4H | McMullen | 5,875 | 2,442 | 955 | 550 |
| Peeler Ranch EFS 10H | Atascosa | 6,172 | 2,078 | 670 | 450 |
2016 Re-fracked Wells
| Well | Vintage | Pre-Frac 30day ,bod | Post-Frac 30day ,bod | Incremental EUR, MBO (Est.) |
| Tyler Ranch EFS 1H | 2010 | 24 | 118 | 153 |
| Tyler Ranch EFS 2H | 2011 | 48 | 51 | 15 |
| Hoskins EFS 1H | 2011 | 42 | 150 | 55 |
| Hoskins EFS 3H | 2013 | 19 | 117 | 123 |
| Teal Ranch EFS 2H | 2013 | 20 | 56 | 75 |
CEO Commentary
Eric McCrady, CEO of Sundance, commented, “The production rate in the fourth quarter was impacted by delays in bringing completed and re-fracked wells into production and deferral of the drilling and completion of one well in McMullen County due to the length of time it took to renegotiate the terms on a farm out agreement. Unplanned downtime related to surface and down hole equipment issues in the field also led to lower production in the quarter. We are focused on optimizing field performance and anticipate the issues being resolved in the second quarter of 2017. We believe we will improve our operational efficiencies in 2017 through changes in equipment and vendors. In general, we are pleased with the early stage production profiles from the wells in our 2016 capital program. We believe we can grow production in 2017 to a range of 7,700 to 8,500 BOED, and exit the fourth quarter of 2017 between 9,000 and 10,000 BOED.”
Mr. McCrady also commented, “During the fourth quarter of 2016 our lender, Morgan Stanley, re-affirmed our borrowing base at $67 million. Further, we are continuing with the sale process for our assets in the Anadarko Basin, which we hope to have completed during the first half of 2017. The proceeds from this sale, combined with our estimated 2017 EBITDA of $80-$85 million and the cash on our balance sheet at the end of 2016, should provide enough liquidity to support our 2017 drilling and completion budget, with the possibility of a modest outspend to the forecast.”
2017 Capital Expenditure Plan
Grace Ford, COO of Sundance, added, “Our 2017 capital expenditures are focused on our assets in McMullen, Live Oak and Atascosa Counties where we intend to deploy two drilling rigs during the first quarter. We plan on drilling and completing 13 or 14 gross wells in the area, with a vast majority of the wells coming into production during the second half of 2017. Three of these wells will be testing a second target in the Lower Eagle Ford and, if successful, will add significantly to our location inventory in McMullen, Live Oak and Atascosa Counties. In addition we will also drill and complete 2 wells in Dimmitt County where we continue to see improving year-over-year results increasing our per foot recoveries. As always we will continue to refine our drilling and completion designs to drive higher returns. We are continuing to monitor the performance of the five wells we re-fracked during 2016 which have demonstrated an average uplift of 54% from their base production profiles. We have identified additional candidates in our existing proved developed producing well inventory for this type of stimulation, but we want to gather more data and production results from these first five wells for several more months before moving forward with further re-frack activities.”
About Sundance Energy Australia Limited
Sundance Energy Australia Limited (“Sundance” or the “Company”) is an Australian-based, independent energy exploration company, with a wholly owned US subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA.
The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford. A comprehensive overview of the Company can be found on Sundance’s website at www.sundanceenergy.net.
Summary Information
The following disclaimer applies to this document and any information contained in it. The information in this release is of general background and does not purport to be complete. It should be read in conjunction with Sundance’s periodic and continuous disclosure announcements lodged with ASX Limited that are available at www.asx.com.au and Sundance’s filings with the Securities and Exchange Commission available at www.sec.gov.
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same.
These forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with our the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward looking statements attributable to Sundance, or any of its affiliates or persons acting on its behalf. Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
United States
Eric McCrady, Managing Director
Tel: +1 (303) 543 5703
Jon Kruljac, VP of Capital Markets and Investor Relations
Tel: +1 (303) 520-7479
Australia
Mike Hannell, Chairman
Tel: +61 8 8363 0388
Source: Sundance Energy Australia Limited via GLOBE NEWSWIRE
