Sun Resources (ASX: SUR) has increased the size of its Delta Oil project in Texas up to 8347 acres (33.8 square kilometres) as approaches its target of holding 10,000 acres over the highly prospective Eagle Ford fairway.
The company holds a 100% working interest (75% net revenue interest) in the leases and is in discussions with the seller regarding the remaining acreage.
Sun had said previously that the experiences of other Eagle Ford Shale operators near its Delta Oil project in Texas indicated that payback on wells could be achieved within 12 months.
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 produce oil at initial rates of 800 barrels per day or more with lower than expected decline rates, 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.
Competition for Eagle Ford shale acreage is heating up with Aurora Oil & Gas (ASX: AUT) making a A$107 million offer for fellow Australian Eureka Energy (ASX: EKA) yesterday in a bid to increase its stake in the Sugarkane field in South Texas.
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