Sundance Energy Australia Limited Provides Year-End Reserves Update

DENVER, Feb. 10, 2017 (GLOBE NEWSWIRE) — Sundance Energy Australia Limited (ASX:SEA) (NASDAQ:SNDE) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford in South Texas, is pleased to announce its proved reserves as December 31, 2016. Sundance’s estimated proved reserves were prepared by Ryder Scott Company, L.P.

  • Proved reserves at year-end 2016 of 33.8 MMboe represent a 29% (1) increase over year-end 2015 proved reserves.  Pre-tax present value of reserves (discounted at 10%) at year-end 2016 was approximately $340.0 million.
  • Proved undeveloped reserves increased by 37% to 20.5 MMboe as of December 31, 2016 reflecting continued development of Sundance’s acreage.
  • Sundance’s proved reserves were 39% proved developed producing and 79% liquids (61% oil).
  • Proved reserves revisions, extensions, discoveries and other additions of 8.3 MMboe during the year equate to a reserve replacement ratio of approximately 358%
  • Sundance’s finding & development cost (F&D) for proved developed producing reserves was $12.31 per barrel of oil equivalent (boe) for the year ended December 31, 2016.

Grace Ford, Chief Operating Officer of Sundance, commented, “We are pleased with the increase in our proved reserves as a result of the 2016 development program and asset aggregation activities we consummated during the year.  Of more importance to the Company and our stakeholders, is the capital efficiency with which we achieved this growth.  Our recycle ratio of 1.47 for 2016, not only demonstrates discipline in controlling costs, but also the ability of our evaluation team to identify acquisitions that are accretive to our asset base.  We look forward to executing our 2017 drilling and completion program which includes down spacing tests in our McMullen Area assets, and applying the next generation of completion design in Dimmit County that, collectively and separately, could lead to further efficient growth in reserves.”

Reserve Estimates

The following tables provide summaries of the Company’s reserves as estimated by Ryder Scott Company, L.P. using NYMEX strip (varying) pricing as of December 31, 2016, as well as reference prices of $42.75/bbl and $2.49/MMBTU in accordance with the applicable rules of the Securities and Exchange Commission.

NYMEX Strip (varying) Pricing
Oil/Condensate Natural Gas
Liquids
Natural Gas   PV9  (US$) PV10  (US$) PV10  (A$)
Mbbls Mbbls MMcf Mboe M M M
Proved developed producing 7,841 2,463 18,022 13,308 220,394 213,318 296,000
Proved developed non-producing 1 1 7 3 (60) (60) (83)
Proved undeveloped 12,805 3,610 24,264 20,459 137,473 126,738 175,862
Total Proved   20,647   6,074   4,293   33,770   357,807   339,996   471,778

NYMEX strip (varying) pricing as of December 31, 2016, adjusted by lease for transportation fees and regional price differentials, used for the Reserves is shown in the following table:

Year Oil NGLs Gas
($/bbl) ($/bbl) ($/mcf)
2017 55.67 19.00 3.87
2018 54.31 19.05 3.24
2019 53.84 18.19 2.86
2020 53.80 16.93 2.65
2021 53.95 17.18 2.72
2022 54.26 17.16 2.72
2023 54.96 17.18 2.78
2024 55.32 17.15 2.94
2025 55.77 17.71 3.11
2026 55.85 17.83 2.89
2027+ 55.85 17.83 2.90
Security and Exchange Commission Pricing
Oil/Condensate Natural Gas
Liquids
Natural Gas  
Mbbls Mbbls MMcf Mboe
       
Proved developed producing 7,440 2,269 16,704 12,493
Proved undeveloped 11,001 2,825 19,026 16,997
Total Proved   18,441   5,094   35,730   29,490

Footnotes and Definitions

(1) 2016 production volumes were not accounted for in calculation of year-over-year increase in proved reserves.

Operating costs used in this report are based on operating expense records of Sundance.

Capital costs used in this report were provided by Sundance and are based on authorizations for expenditure and actual costs from recent activity.

Future net revenue is after deductions for Sundance’s share of production taxes, ad valorem taxes, capital costs, and operating expenses but before consideration of any income taxes.

“PV9” is defined as the discounted Net Revenues of the Company’s reserves using a 9% discount factor.

“PV10” is defined as the discounted Net Revenues of the Company’s reserves using a 10% discount factor.

Reserves are estimated in US dollars.  US dollars are converted at 1.3876 USD/AUD.

“1P Reserves” or “Proved Reserves” are defined as Reserves which have a high likelihood or a 90% probability that the quantities actually recovered will equal or exceed the estimate.

“boe” is defined as barrel of oil equivalent, using the ratio of 6 mcf of Natural Gas to 1 bbl of Crude Oil.  This is based on energy conversion and does not reflect the current economic difference between the value of 1 MCF of Natural Gas and 1 bbl of Crude Oil.

“m” is defined as a thousand.

“mmboe” is defined as a million barrels of oil equivalent.

“recycle ratio” is defined as unhedged EBITDA Margin per boe divided by PDP F&D costs.

About Sundance Energy Australia Limited

Sundance Energy Australia Limited (“Sundance” or the “Company”) is an Australian-based, independent energy exploration company, with a wholly owned US subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA.

The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford.  A comprehensive overview of the Company can be found on Sundance’s website at www.sundanceenergy.net.

Competent Person’s Statement

This presentation contains information on Sundance Energy’s reserves which has been reviewed by Stephen E. Gardner, a Professional Engineer employed by Ryder Scott Company, L.P. who practices under State of Colorado license number 44720.  Mr. Gardner has consented to the inclusion of this information in the form and context in which it appears.

Summary Information

The following disclaimer applies to this document and any information contained in it. The information in this release is of general background and does not purport to be complete. It should be read in conjunction with Sundance’s periodic and continuous disclosure announcements lodged with ASX Limited that are available at www.asx.com.au and Sundance’s filings with the Securities and Exchange Commission available at www.sec.gov.

Forward Looking Statements

This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same.

These forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with our the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward looking statements attributable to Sundance, or any of its affiliates or persons acting on its behalf.  Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:
United States
Eric McCrady, Managing Director
Tel: +1 (303) 543 5703

Jon Kruljac, VP of Capital Markets and
Investor Relations

Tel: +1 (303) 520-7479

Australia
Mike Hannell, Chairman
Tel: +61 8 8363 0388