Sun Resources (ASX: SUR) could achieve payback on wells it drills at its Delta Oil project in Texas within 12 months as indicated by the experiences of other Eagle Ford Shale operators in the area.
The company said operators in Leon and Madison counties are having the greatest success with horizontal well bores of up between 6000 and 7000 feet (1829 to 2133 metres) that are completed with multi-stage fracture stimulations.
These wells drain lease areas of about 120 acres (0.49 square kilometres) and deliver initial production rates of 800 barrels of oil per day or more. Production decline rates have also being more modest than previously reported, adding to the commercial potential of the Eaglebine/Woodbine play.
Average cost of drilling, fraccing and bringing these wells into production is about US$5 million (A$4.8 million) to US$6 million each.
Sun said it Is currently completing due diligence on a seventh tranche of leases that will take it total lease position in the Delta Oil project in Leon County to beyond 8000 acres.
It also noted that demand for leases within Leon County was heating up with unconfirmed reports of lease sales targeting the Eaglebine/Woodbine reaching up to US$2500 per acre near the Delta Oil project.
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