CALGARY, ALBERTA--(Marketwire - Nov. 19, 2012) - Sundance Energy Corporation (TSX VENTURE:SNY)(OTCQX:SNYXF) ("Sundance" or the "Corporation") is pleased to announce that it has entered into participation agreements (the "Farm-out") for a portion of its 50% owned, 27 contiguous section (17,280 acre) Alexander Property and is in the process of obtaining a license to drill a test well at 16-11-56-27-W4M (the "16A-11 Test Well"). 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. The Farm-Out participants consist of a group of arms length and non-arms length parties (the "Participants").
Pursuant to the terms of the Farm-out, Sundance will receive a $120,000.00 equalization payment from the Participants. The Participants will then pay 33% of the costs to drill, complete and equip the 16A-11 Test Well in order to earn a 21% working interest in the well and the applicable drilling spacing unit. Sundance will pay 17% of the costs to drill, complete and equip the 16A-11 Test Well and will maintain a 29% working interest in the well and the applicable drilling spacing unit. By participating in the 16A-11 Test Well the Participants will also earn the right to participate for a 17.5% working interest in future wells drilled on 5 of the 27 sections (3,200 acres) of land that comprises the Alexander Property (the "Farm-out Lands"). Sundance will maintain a 32.5% working interest in the Farm-out Lands and a 50% working interest in the other 22 sections (14,080 acres) of land that comprises the Alexander Property. If at any time in the future a Participant declines on its right to participate in its working interest on a well proposed to be drilled on the Farm-out Lands, the Participant will lose all rights to participate in future wells to be drilled on the Farm-out Lands.
Sundance will be the operator of the 16A-11 Test Well and will remain the operator of 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. Drilling of the 16A-11 Test Well is planned to commence before calendar yearend.
The Farm-Out is subject to review and approval by the TSX Venture Exchange.
Ochapowace, S.E. Saskatchewan Drilling Extension
Sundance also announces that it has obtained approvals from the Chief and Council of the Ochapowace First Nation to extend the Corporation's drilling commitments on IOGC Permit #OP-3293 in S.E. Saskatchewan (the "Ochapowace Permit") from December 31, 2012 until December 31, 2013. The drilling commitment extension is subject to final approval by Indian Oil and Gas Canada ("IOGC").
A drilling license for the next well to be drilled on the Ochapowace Permit, the Ochapowace 16- 32-17-3W2M well (the "16-32 Vertical Test Well"), has been obtained and Sundance is currently in the process of finalizing the surface lease application with IOGC. The 16-32 Vertical Test Well has been identified utilizing 3D seismic data. The 16-32 Vertical Test Well will be drilled at a location which is approximately 12 meters structurally higher from Sundance's Ochapowace 6-5 Vertical Test Well (drilled and standing cased), which encountered very thick but wet Jurassic age sands interpreted to be comparable to sands producing economic light oil on proximal lands in the Wapella, Red Jacket and Coothill oil fields. The Ochapowace 6-5 Vertical Test Well also recovered minor amounts of free oil from both the Bakken and Lodgepole formations. Sundance feels that by moving up structure in a more favorable location from the oil shows in the Ochapowace 6-5 Vertical Test Well, the Ochapowace 16-32 Vertical Test Well may be ideally situated to trap hydrocarbons in the Bakken, Lodgepole and Birdbear formations as well as the shallower Jurassic Sands. Drilling of the Ochapowace 16-32 Vertical Test Well is planned to commence in the first quarter of 2013. Sundance intends to drill the Ochapowace 16- 32 Vertical Test Well with large enough casing to allow a horizontal leg(s) to be kicked-off from the well if a target formation is encountered that warrants horizontal drilling. Sundance owns 100% interest in the Ochapowace Permit and is the operator.
Sundance further announces that it has mailed materials for its shareholder meeting (the "Meeting Materials") to be held at its office located at Suite 500, 1414-8th Street S.W., Calgary, Alberta on Thursday, December 13, 2012 at 10:00 A.M. (MST). The Meeting Materials have been mailed to all shareholders of record as of the close of trading on November 9, 2012.
In addition to standard annual meeting matters, Sundance will seek shareholder approval to consolidate its common shares, at the discretion of its Board of Directors, on the basis of up to one post-consolidation share for every ten pre-consolidation shares. Sundance's Board of Directors does not currently intend to give effect to any share consolidation, however it wishes to obtain approval to consolidate to provide greater flexibility, if required, to secure financing for the development of its core properties at Alexander, Alberta and Ochapowace, S.E. Saskatchewan.
Sundance Energy Corporation is a junior publicly traded oil and gas company whose primary focus is exploring First Nation Lands in Western Canada. Sundance trades in Canada on the TSX Venture Exchange under the trading symbol "SNY".
Forward Looking Statements & Additional Cautionary Language
This news release contains forward-looking statements relating to the future operations of the Corporation and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding future plans and objectives of the Corporation, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Corporation's expectations are exploration risks detailed from time to time in the filings made by the Corporation with securities regulations.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Sundance. As a result, we cannot guarantee that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and Sundance does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved nor disapproved the information contained herein.