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SUN RESOURCES NL - ASX: SUR
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Description
Sun Resources NL ("Sun Resources") is listed on the Australian Stock Exchange (ASX) under code SUR. Sun Resources' strategic levels of project equity, plus its modest market capitalization means that the company is very highly leveraged in its ongoing exploration programs. Key exploration assets are in the states of Texas and Louisiana in the United States of America, Thailand, Malta and Australia with a small cash flow currently delivered from production assets in the onshore Gulf of Mexico region of the USA. Sun Resources' goal is to create shareholder value through strategic investments in proven oil & gas fairways, particularly onshore, where cash flow can be delivered quickly. Emphasis is on regions of the world that have excellent fiscal terms and low political risk; current focus areas are the onshore Asia and Europe.
Australian Projects
Sun Resources is part of a consortium of companies exploring one permit in the Dampier Sub-Basin (WA-254-P). The basin has become Australia’s richest oil and gas province since Bass Strait, with reserves in excess of nine billion barrels of oil equivalent.
Sun Resources is currently marketing it's Joint Venture interest (7.86% - 9.25%) ahead of the next well commitment from June 2010. Block 2 of WA-254-P contains the under developed Sage oil discovery, with a P50 oil in place resource of 15mmbbl (gross).
United States of America Projects
Sun Resources is following and delivering a strategy of building up significant cash flow in the USA Onshore Gulf Coast and then applying these funds to develop and participate in larger scale, high impact projects, particularly in SE Asia. The USA offers excellent investment opportunities to small companies because:
* A demand supply imbalance of a large market for energy exists
* Ready access to infrastructure, even for smaller discoveries
* Lower technical risk within prolific hydrocarbon bearing basins
* Low exploration & development costs by world standards for onshore projects
* High energy pricing in particular for gas.
Gas prices varied within a range of US$6 to 8 per mscf during 2007 and 2008, reflecting the use of gas for heating, and are generally 2-3 times the price received for gas within Australia. Gas price is a reflection of the current (and growing) 4 trillion cubic feet (“tcf”) pa gas imports over 19 tcf pa gas production (23 tcf pa gas consumption). Gas price is also being underpinned by the prospect of increased importation of liquefied natural gas (“LNG”) to satisfy demand. Gas prices peaked at US$13 per mscf during 2008, collapsed to US$3 per mscf in early 2009 (during the Global Financial Crisis) but now has recovered to the range of US$3.50-$4.50 per mscf.
Sun Resources current exploration and production emphasis is on both oil and gas in conventional geological settings and within conventional reservoirs, principally located on the South Texas Gulf Coast (Flour Bluff Gas Project, Projects Margarita, Redback and Meek) and Louisiana Gulf Coast (Lake Long Project). Recent drilling has been successful on Gulf Coast, South Texas and Louisiana USA projects, generating up to US$2mm net revenue in 2009, to provide significant cash flow to fund the Company’s exploration activities.
Thailand L20/50 Block (50% Interest)
The L20/50 block is located in the southern portion of the Phitsanulok Basin and is 3,947 km2 in area and has been very lightly explored. The Phitsanulok Basin contains the largest onshore oil and gas accumulation in onshore Thailand, the Sirikit Field, with reserves in excess on 200 million barrels of oil equivalent ("mmboe"). Current daily Sirikit production is 20,000bo, the Company received Notice of Qualification to Bid from the government in early September 2007 and in late December 2007 was advised of the successful tender for L20/50. The Company with Carnarvon Petroleum accepted the block award from the government at the official signing ceremony in Bangkok on 21 January 2008.
The operator considers that to properly evaluate the licence, up to three new wells will be drilled into three different play types. Carnarvon has received approval for environmental impact assessments (EIA) of nine drilling locations for early 2011 from which the three will be chosen for a drill programme of two firm wells and one contingent well. The Joint Venture has commenced planning for drilling in fourth quarter of this year, subject to granting of final government approvals. This timing takes into account the lead time required to obtain environmental approvals and to subsequently prepare the drill pads.
Malta Project (20% Interest)
The Malta Joint Venture comprises Sun Resources (20%) and Pancontinental Oil & Gas NL (“Pancontinental”) (80%) on two contiguous permit areas - ESA Area 4, Block 3 and ESA Area 5 in southern Maltese waters abutting Tunisia and Libya.
Large stacked Lower Cretaceous to Eocene age reef mound prospects such as Chianti and Limoncello were delineated inside Maltese waters in 2004 by Sun Resources and Pancontinental in ESA Area 5. These have speculative reserve potential, ranging from a mean recoverable oil potential of 455 mmbo for Chianti to 968 mmbo for Limoncello. The potential estimates are comparable with neighbouring commercial giant field analogues in Libyan and Tunisian waters.
At the Maltese Government’s request, the Joint Venture suspended the seismic survey in September 2005 to assist the Maltese government in facilitating the resolution of maritime border issues it has with both Tunisia and Libya. Progress, albeit slow, continues to be made on the matter. An Agreement between Malta and Tunisia was signed on 27 February 2006 for joint oil and gas exploration and exploitation in zones of the Continental Shelf located between Malta and Tunisia which in part encompasses the western area of the ESA in Area 5. Since the agreement, Malta and Tunisia, through a joint expert committee reporting to the two country’s Ministers of Foreign Affairs, have been working on the determination of the exact coverage of the joint exploration and exploitation zone between the two countries.
Similar discussions between Malta and Libya are ongoing to resolve the southern boundary issue in the southern area of the ESA, and it is hoped that a similar agreement between Malta and Libya will be forthcoming in the very near future. Pan Continental continues to actively monitor and lobby the border situation with the Government of Malta.
Mine For
oil, gas
Location of operation(s)
USA, Malta, Thailand, Australia
Australian Basins
Carnarvon
Address
Unit 16, Subiaco Village, 531 Hay St
SUBIACO, WA, AUSTRALIA
Phone
(61 8) 9388 6501
Website
Last Updated
27/01/2011
The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.
