Sundance Energy Australia Limited (ASX: SEA) is an Australian listed company engaged in the acquisition and development of oil and natural gas resource in the Gulf Coast of South Texas through its wholly owned subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA.
Today, the company provided an update regarding its recent development activities and 2019 development plan.
Given the current uncertain commodity price environment, SEA is in the process of evaluating its 2019 development plan which will be released soon. Despite the lower commodity prices, SEA’s 2018 impressive drilling results demonstrate its high-quality Eagle Ford portfolio characterized by strong full-cycle economics with break-even of approximately $30 per boe, inclusive of recovering acquisition costs, development costs, production costs, and all overhead costs.
The Company has plans to increase its production, EBITDA and net asset value, both on an absolute and per share basis along with operating within its cash flow during 2019. Management will work on a capital plan focussed towards these goals while maintaining liquidity and protecting the balance sheet. There are no debt maturities until late 2022, significant liquidity, and a strong hedge book to protect payback on already invested capital.
SEA brought the Live Oak County 2-well Idylwood pad (04H and 05H) online in October with the completed lateral length of 5,500 to 6,500 feet and 85% oil, the Live Oak County 4-well James Keith Esse pad (06H, 07H, 08H, and 09H) online in November with the completed lateral length of around 5,200 feet and 76% oil, and the 2- well McMullen County Hoskins pad (20H and 21H) online during the first week of December with the completed lateral length of 7,200 feet. Quarter to date, Sundance has brought eight wells online in total.
Currently, SEA is drilling the 4-well Roy Esse 15H, 16H, 17H and 18H pad in Live Oak County and the 2-well Red Ranch 18H and19H pad in Dimmit County, and the 3-well Harlan Bethune 22H, 23H. The 24H pad in Live Oak County which began in the last week of November is anticipated of turning the pad to sales in mid-December bringing the total number of fourth quarter wells brought online to 11. Sundance has transitioned to use Schlumberger with the Hoskins pad for completion services in order to achieve material cost savings including the ability to utilize locally sourced sand.
On 11 December 2018, SEA came up with an announcement regarding the share consolidation which stated that from 13 December 2018, SEA shares will trade under ticker SEADA till 21 December 2018 and will return to SEA post consolidation with a reduction in the number of shares from 6.87 billion to 687 million.
On 14 November 2018, the company announced a 40% increase in its Senior Secured Borrowing Base Facility from US $87.5 million to US $122.5 million to provide additional liquidity cushion to run the business.
Over the past three months, the scrip price has dipped by almost 40% falling from 76 cents on 13 September 2018 to 45 cents today.
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