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Sundance Energy unveils $221m Eagle Ford buy

Sundance Energy unveils $221m Eagle Ford buy

Photo by Bloomberg

15th March 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Sundance Energy has reported a $221.5-million acquisition and a $260-million capital raise.

The company on Thursday announced the acquisition of 21 900 acres and 1 800 bbl/d of oil equivalent in the Eagle Ford Shale, on trend with the company’s existing core McMullen, Atacosa, LaSalle and Live Oak County properties.

The acquisition includes varying working interest in 132 wells on the acquired acreage, with Sundance expecting to begin pad drilling the acquired assets in the second quarter of 2018, with production from initial developments expected in the third quarter of 2018.

“This acquisition represents a compelling, highly accretive opportunity to continue our strategy of aggregating assets in the Eagle Ford,” said Sundance MD and CEO Eric McCrady.

The transaction will result in Sundance holding a total of 56 600 acres in the Eagle Ford, with an inventory of 716 gross undrilled locations, and a platform for production and earnings growth for the next decade.

With the completion of the acquisition, the company has a pro-forma net reserve totalling 87.8-million barrels of oil equivalent 1P and 149.3-million barrels of oil equivalent 2P.

Meanwhile, the company on Thursday also announced a $260-million equity raising, consisting of a share placement to professional and sophisticated investors and an entitlement offer.

Some 370.69-million shares will be offered under the initial placement, priced at 5.9c each, to raise some $17.2-million.

The company is also undertaking a one-for-one accelerated non-renounceable entitlement offer, issuing 1.2-billion shares to raise a further $58-million. The entitlement offer is fully underwritten.

“The funding provides ample liquidity to execute a two rig development programme that should result in significant growth in production, cash flows and net asset value per share,” McCrady said.

In addition to the equity funding, Sundance is also refinancing its existing debt facilities and has entered into a new syndicated institutional term loan to raise $250-million, largely to extinguish the existing term loan of $125-million and reserve based lending facility of $67-million.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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