Sundance Energy prepares to complete Alexander, Central AB test well
Wednesday, January 16, 2013
- The Alexander Property is located just northeast of the city of Edmonton, Alberta and immediately adjacent to a Detrital Sand and Alexander Sand light oilfield that is undergoing continued development by another operator.
Sundance Energy Corporation (TSX VENTURE:SNY) (OTCQX:SNYXF) announce that it has drilled, logged and cased a test well at 16-11-56-27-W4M (the "16A-11 Test Well") on its 27 contiguous section (17,280 acre) Alexander Property. The Alexander Property is located just northeast of the city of Edmonton, Alberta and immediately adjacent to a Detrital Sand and Alexander Sand light oilfield that is undergoing continued development by another operator.
As previously announced, 33% of the costs to drill, complete and equip the 16A-11 Test Well were paid by various participants in order to earn a 21% working interest in the well and the applicable drilling spacing unit and a right to participate for a 17.5% working interest in future wells drilled on 5 of the 27 sections that comprise the Alexander Property. Sundance is paying 17% of the costs to drill, complete and equip the 16A-11 Test Well, will maintain a 29% working interest in the well and the applicable drilling spacing unit and will continue to have a 50% interest in the other 22 sections of land that comprise the Alexander Property. Sundance and its partner have finalized plans to complete the 16A-11 Test Well and will begin these operations as soon as possible.
Sundance is the operator of the 16A-11 Test Well and the Alexander Property. The 16A-11 Test Well has been identified utilizing extensive 3D seismic data and modeling. The 16A-11 Test Well is primarily targeting light oil production from the Detrital Sand formation and secondly light oil production from the shallower Alexander Sand formation.
Ochapowace Permit, SE Saskatchewan
Sundance would also like to announce that it has reached an agreement with an issuer that owns the potash rights below Sundance's target oil and gas formations on the Ochapowace Permit to drill a vertical test well on a 3D seismic defined structural high. The test well will be drilled at 16-32-17-3 W2 (the "16-32 Test Well") and is intended to further evaluate the light oil potential on the Ochapowace Permit in the Bakken, Lodgepole, Torquay and Birdbear formations. The majority of the costs to drill, core and complete the 16-32 Test Well will be paid for on behalf of Sundance in exchange for Sundance allowing this issuer to license the 3D seismic data previously shot and interpreted by Sundance on the Ochapowace Permit. Sundance anticipates that drilling of the 16-32 Test Well will commence in the first quarter of 2013.
Sundance has already earned 5 sections (3,200 acres) of land on the approximately 40,000 acre Ochapowace Permit, has 100% interest in the oil and gas rights and is the Operator. Sundance will also earn a 100% interest in the oil and gas rights in an additional 5 sections (3,200 acres) of land as a result of the 16-32 Test Well being drilled.
Lashburn Lease, SW Saskatchewan
Sundance would also like to announce that a test well will be drilled by an industry partner in the first quarter of 2013 on its Lashburn Lease (the "Lashburn Test Well"). The Lashburn Test Well will be drilled at no cost to Sundance, yet Sundance will maintain a 40% interest in the test well. The industry partner has the option to drill up to 7 additional wells on the Lashburn Lease. Sundance will maintain a 40% interest in each well drilled despite not being responsible for any of the drilling costs.
Cancellation of Stock Options
Sundance has cancelled 2,650,000 incentive stock options previously issued to directors, officers, employees and consultants. The stock options had an exercise price of $0.50 and a 5-year term ending on April 8, 2016