The company announced today that in collaboration with other US energy interests, it has acquired 8300 acres of leases over the prospect in the gas-rich Illinois Basin. Sundance said it was looking to expand this acreage in the basin to about 50,000 acres.
Sundance managing director Jayme McCoy said this new prospect in Indiana represented a significant expansion of US activity for the Adelaide-based company, which is currently exploring for oil and gas in Oklahoma and Montana.
“We are excited to have commenced our development program in the Illinois Basin leading up to our five-well pilot program in the new prospect later this year,” he said.
“This opportunity fits neatly with our ongoing efforts to acquire oil and gas assets which complement and enhance our company’s long-term growth strategy.”
The Illinois Basin prospect’s primary target formation is the gas-rich New Albany Shale. The formation in the prospect area is quite shallow, less than 1500 feet (457m) deep, allowing for cost-effective development.
Other major US oil and gas explorers have been recently successful in exploiting the New Albany Shale using horizontal drilling technology.
Those companies’ experiences in the play, in conjunction with a comprehensive assessment of the targeted horizon prepared by the Gas Research Institute, contributed to Sundance’s development decision for the Basin, McCoy said.
“The New Albany Shale in this area has been productive since the late 1800s, and the economic fundamentals of the prospect – from lease acquisition costs and terms, to drilling expenses – bode well for the play’s long-term prospects,” he said.