Sundance Energy to acquire acreage in Eagle Ford Shale

Sundance Energy has signed an agreement via its US subsidiary to purchase a land package of 21,900 net acres in the Eagle Ford Shale for a sum of around $221.5m.

The acquisition is primarily located in Eagle Ford’s volatile oil window and is expected to offer 1,800 barrels of oil a day (boe/d).

The acreage is also situated close to Sundance’s existing operations in McMullen, Live Oak, Atascosa and La Salle counties in Texas.

Sundanceis set to acquire varying working interests ranging from 18%-100% in a total of 132 wells across the acreage under the deal.

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

“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.”

The transaction will enable the company to have a total of 56,600 net acres, as well as an inventory of 716 gross undrilled locations in the Eagle Ford.

In addition, the company is also raising $260m of new equity through the placement of shares to professional and sophisticated investors, as well as an entitlement offer.

As part of the initial placement, Sundance will offer around 370.69 million ordinary shares to raise a sum of $17.2m.

An additional $58m is planned to be raised via a non-renounceable entitlement offer, which includes the issuance of around 1.25 billion shares.

Furthermore, Sundance is currently refinancing its existing debt facilities and has reached a new syndicated institutional term loan to secure an additional $250m of funding.

The loan proceeds will be used to settle the company’s existing term loan of $125m and reserve-based lending facility of $67m.