The funds were raised through a placement of 21,500,000 fully paid ordinary shares at 35c each to clients of Euroz Securities Limited.

“The prime objective is to expose significantly more reservoir rock to the well bore surface than can be achieved by drilling a conventional vertical well,” managing director, Jayme McCoy said.

“Based on the technical information gained in drilling vertical wells to date in Oklahoma, and industry trends in drilling in the Arkoma Basin, it is most beneficial to amend the existing vertical drilling program in order to embark immediately on the drilling of horizontal wells.”

Sundance Energy recently spudded its first horizontal gas well in the United States - Huffstutlar A 21-10 – the fourth well in a 6-8 well maiden exploration program in its Ashland Prospect. The well was drilling ahead at 1199 metres this morning, the company said.

The first three wells in this year’s drilling program were vertically drilled. The first of them appeared to have fracture stimulated out of zone and was currently flowing back formation water, Sundance said.

“The company believes that this well is a candidate for a horizontal Woodford Shale wellbore out of the cased hole,” McCoy said.

Meanwhile, the second well successfully fracture stimulated on October 18 was currently flowing back with good back pressure, reported Sundance.

The third well, which had good gas shows in both of its targeted formations as well as in an uphole zone, was scheduled for a fracture stimulation on November 1, it said.

Horizontal drilling involves drilling and completing a well that starts as a vertical or inclined linear bore extending from the surface to the ‘kick-off point’ above the target area.

The well bore then bears off on an arc to intersect the target area or reservoir at the ‘entry point’. The bore continues at a near horizontal attitude tangent to the arc, to substantially or entirely remain within the reservoir until the desired bottom hole location is reached.

Sundance's issue of placement shares is conditional upon the approval of the existing shareholders at the October 27 AGM.