Sun Resources (ASX: SUR) is positioned to acquire a significant oil project in the U.S., with the company's shares currently in a voluntary suspension due to a capital raising plan being undertaken.
The acquisition of the Delta Oil Project - consists of an extensive 10,000 acres of oil and gas leases in the emerging ‘Eaglebine’ oil play within the shallow oil zone of the Eagle Ford Shale trend.
Independent consulting firm Ralph E. Davis has estimated unrisked 10 million barrels of net Prospective Oil Resources in one sand unit of the Delta Oil Project.
Assuming production of the 10 million barrels of Prospective Resources, Ralph E. Davis estimated the NPV of the Delta Oil Project of US$310 million would equate to:
- NPV of US$10,333,333 per well; and
- NPV of US$31 per barrel of oil for 10 million barrels of oil from one 20 feet thick sand unit.
- NPV of US$31 per barrel of oil for 10 million barrels of oil from one 20 feet thick sand unit.
Recent horizontal wells within 35 miles of the Delta Oil Project have obtained initial flow rates of 900 to 1,200 barrels of oil per day from multi-staged fracced laterals of 6,000 to 7,000 feet in sandstone units and operators are reporting Estimated Ultimate Recoveries (EUR) of 300,000 to 600,000 barrels of oil per well.
Sun has entered into a binding Term Sheet with a Houston based private oil and gas company, where Sun will acquire 100% working interests in all of the leases, each with a minimum 75% net revenue interest, a three year lease term and in most instances, also have a 2 year option to extend the lease term.
Highlighting the potential of the project, independent petroleum engineering and geological consulting firm Ralph E. Davis estimates unrisked 10 million barrels of net Prospective Oil Resources in just one sand unit.
The consultants also pointed to the potential upside of a further unrisked 10 to 20 million barrels of Prospective Oil Resources in other sand units in the 450 feet thick prospective sequence.
Source: Proactive Investors
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