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Market:	ASX
Sector:	Oil and Gas Exploration and Production
EPIC:	AZZ
Latest Price:	0.40 (0.00%)
52-week High:	0.55
52-week Low:	0.36
Market Cap:	102.70M

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Antares Energy

Antares Energy (ASX: AZZ) is an oil and gas exploration and production company focused on projects in the Permian Basin in Texas.

Antares Energy taps debt facility as it starts Texan drilling aimed at more than doubling production

Thursday, February 02, 2012 by Bevis Yeo

Antares Energy (ASX:AZZ) has completed the second drawdown of A$9.4 million (US$10 million) from its A$188.5 million (US$200 million) term debt facility to support the development of its oil and gas assets in the Permian Basin, Texas.

This development will see Antares drill at least 30 wells in the Permian Basin by the end of 2012. This will include 24 wells in the Southern Star project and 6 wells in the Big Star and Northern Star projects.

The entire program is expected to cost about A$47.1 million (US$50 million), which Antares will fund by drawing upon the debt facility in multiples of A$9.4 million (US$10 million) as the program continues.

All three projects target the Wolfberry oil play, which is also targeted by a number of US companies such as Pioneer Natural Resources (NYSE: PXD) and Concho Resources (NYSE: CXO), both of whom have permits adjacent to those held by Antares.

Antares said this will result in the entire Southern Star project being placed under production.

The 12.6 square kilometre (3120 acre) Southern Star project currently holds over 30 wells producing more than 1000 barrels of oil equivalent (boe) per day with proved reserves of 12.6 million boe.

Production is expected to climb to more than 2500 boe per day following the completion of this year’s drilling program.

Neither Big Star nor Northern Star are as advanced as Southern Star, though they have the potential to add to the company’s production and reserves figures.

At Big Star, Antares has 4 wells which are currently being assessed with another 4 planned this year. Up to 475 wells could be drilled in the 58.1 square kilometre (14,360 acre) area with Antares expecting total proved, probable and possible (3P) reserves potential of 34-47 million boe.

Northern Star has two wells under evaluation with plans for the drilling of up to three more this year. More than 300 wells could be drilled in the 50.2square kilometre (12,400 acre) area for 3P potential of 29-41 million boe.

The Macquarie Bank 36 month facility attracts an interest rate of LIBOR +4% per annum and is payable on a quarterly basis in arrears.

Antares holds an overall 75.6% working interest in Southern Star, a 90% interest in Big Star and 100% in Northern Star.

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