(MENAFN- ProactiveInvestors - Australia) Sun Resources (ASX: SUR) has amended its agreement to purchase a 50% working interest in a 12,293 acre project adjacent to its existing Delta Oil project in Texas from Amerril Energy.
Amerril has agreed to exchange the outstanding payment of about US$4.6 million of the remaining 47.5% interest for 91.96 million Sun shares at a deemed price of A$0.05 each.
The amendment is subject to approval by Sun shareholders at a meeting to be held on or around 11 September.
Once completed, Sun will hold a gross acreage position of 22,000 acres in the rapidly developing Woodbine tight oil play.
The Amerril acreage is also subject to ongoing farm-out negotiations with a number of potential joint venture partners.
Woodbine
The Woodbine is a multi-zone tight oil play, sourced from the Eagle Ford shale, with the reservoir having a high percentage of silica and clastics (sandstone).
It has been identified by former Petrohawk Energy chief and present head of Halcón, Floyd Wilson, as one of the top developing tight oil plays in the U.S.
Sun had noted previously that operators in Leon and Madison counties had the most success with horizontal well bores of up between 6000 and 7000 feet (1829 to 2133 metres) that are completed with multi-stage fracture stimulations.
These produce oil at initial rates of 1000 barrels per day or more with lower than expected decline rates, adding to the commercial potential of the Eaglebine/Woodbine play.
Average cost of drilling, fraccing and bringing these wells into production is about US$5 million (A$4.8 million) to US$6 million each.
Majors such as Gastar Exploration (NYSE: GST), Encana Corporation (NYSE: ECA) and Chesapeake Energy (NYSE: CHJK) have also acquired leases in the play.
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