Sun Resources NL (“Sun”) is a public company based in Perth, Western Australia that is listed on the Australian Stock Exchange (“ASX”) under the code “SUR”. Sun’s key exploration and production assets are in the state of Louisiana, United States.
The Company has decided to refocus on conventional oil projects and after an extensive review of opportunities, has identified an area of interest, located in the protected inland waters area, offshore Louisiana that offers a niche that we believe suits Sun.
Sun has teamed up with Pinnacle Exploration Ltd ("Pinnacle"), a Singapore unlisted public company, which has extensive experience in the area, and whose Board and management are well known to the Sun team. The Breton Sound and surrounding inland shallow waters offshore Louisiana, hold a prolific hydrocarbon basin that was extensively developed in the 1950’s to 1990’s. In the late 1990’s industry activity focus shifted to deeper waters and the area has been largely neglected since. Technical review of the available data, indicates to Sun that there are multiple opportunities for commercial development of established, but moderately thin oil reservoirs which have historically tested or produced oil at modest or sub-economic rates from vertical wells. Sun believes that with good 3D visualization and employing the latest horizontal drilling techniques, which have been refined during the unconventional oil boom, it will be possible to find projects that will produce and will be commercially robust even at current oil prices.
The initial 50/50 Bowsprit lease that was acquired in August 2017, has near term production potential through the planned redevelopment of a reservoir that produced oil in 1960’s at low rates from two vertical wells. Sun as Operator, together with Joint Venture Partner Pinnacle, intend to develop the field with modern horizontal wells and re-establish production. If all goes according to plan, we will be drilling the first well in 2018, to initially test and prove the deliverability of the field. The intent is to then suspend the well until production facilities are installed a few months later and then bring the field onto production.
The new Bowsprit oil project looks very promising, and getting the field on to production will be the prime focus for the Company in the coming year. As we execute the detailed planning work for Bowsprit and incorporate all the data in the surrounding area, Sun will also be mindful of carefully identifying and securing additional follow up project leases.