Carbon Energy claims Queensland’s fifth largest 2P gas Reserve

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THE ROADHOUSE BOWSER: Carbon Energy (ASX: CNX) has announced an increase in its Proved and Probable (2P) Surat Basin gas Reserves to 1,128 petajoule (PJ) (1 trillion cubic feet (Tcf)) of natural gas equivalent or 188 million barrels of oil equivalent (mmboe).

The company said the result has made it the fifth largest 2P gas Reserve in Queensland and has more than doubled its total gas Reserves.

Carbon Energy said the upgrade supports its plans to develop its first commercial scale gas project in Queensland, the Blue Gum gas project.

The company explained the Conceptual Plan for development on MDL374 and land it owns in the Surat Basin is the Blue Gum gas project, which is intended to deliver 25PJ per annum of pipeline quality natural gas from a plant converting the underground coal gasification (UCG) process’ Syngas to pipeline quality gas.

Carbon Energy anticipates first gas could be supplied to local industry from 2017, once finding suitable investment partners and receiving State Government approvals.

Based on projected gas prices, the company claimed the Blue Gum gas project could deliver in excess of $4 billion in gross revenue over a 25 year period and could create more than $200 million in state royalties.

“This Reserve upgrade reinforces Carbon Energy’s ability to provide the Queensland market with access to a major new gas resource and comes at a time when the east coast industrial and domestic market is facing looming gas shortages,” Carbon Energy CEO Morné Engelbrecht said in the company’s announcement to the Australian Securities Exchange.

“We are planning to bring our Reserves onto the market in time to meet the forecast gas shortages towards the end of the decade.

“The constraints on the local gas market are going to hit industry particularly hard.

“We are in discussions with potential industrial off-take partners to supply them with this new source of gas.”

Carbon Energy has recently submitted a Decommissioning Report to Government detailing results of more than 2,000 water samples taken over the past six years.

The company is currently preparing a Rehabilitation Plan for its Bloodwood Creek UCG trial site.

Carbon Energy said it is hopeful of receiving a decision from the Queensland Government allowing it to proceed with the standard approvals process for the Blue Gum gas project shortly after submission of the Rehabilitation Plan.

Website: www.carbonenergy.com.au

Progen completes PG545 second patient cohort assessment

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THE ROADHOUSE PHARMACY: Progen Pharmaceuticals (ASX: PGL) has completed assessment of the second patient cohort in the company’s PG545 Phase 1 clinical trial.

Progen said it had, in conjunction with with an independent medical monitor and the co-ordinating investigators, reviewed the safety data from this cohort and all involved have agreed to progress to the next dose level of PG545.

The company explained each patient in the second cohort received once-weekly 50mg doses of PG545.

No dose limiting toxicities were reported from the group following at least four weeks of treatment.

The recruitment of the third cohort of three patients has commenced.

Each of the patients in the third group will receive 100mg doses of PG545 at once-weekly intervals.

The study is entitled ‘an open-label, multi-centre Phase I study of the safety and tolerability of IV infused PG545 in patients with advanced solid tumours’, and is expected to enrol approximately 25 advanced cancer patients.

The primary objective of the study is the determination of the maximum tolerated dose
(MTD) as defined by significant dose limiting toxicity (DLT).

The secondary objectives are:

Assessment of the safety and tolerability of PG545 following multiple doses in subjects with advanced solid malignancies;

To estimate pharmacokinetic parameters of PG545 and explore pharmacokinetic/pharmacodynamic relationships; and

To document any anti-tumour activity observed with PG545.

The clinical trial is being carried out at three sites in Australia.

Website: www.progen-pharma.com

Rhinomed signs up Japanese distributor

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THE ROADHOUSE PHARMACY: Rhinomed (ASX: RNO) has struck a distribution agreement with Japanese sporting goods wholesaler, Trisports to distribute the company’s Turbine® range of technologies into the Japanese cycling, triathlon and sporting goods retail sector.

The result of the deal is that Trisports is to be appointed as the Japanese wholesale distributor for the growing Japanese sporting goods market.

“We are very pleased to be partnering with Trisports in Japan,” Rhinomed CEO Michael Johnson said in the company’s announcement to the Australian Securities Exchange.

“The agreement fits clearly with Rhinomed’s strategy of partnering with premium distribution partners in key geographies, such as Japan which has an exciting sporting sector.”

Rhinomed explained the Turbine uses its BreatheAssist technology to assist athletes to deal with shortness of breath experienced during aerobic exercise.

The company claims the Turbine can deliver athletes, on average, a 38 per cent increase in airflow through the nasal passages.

The Turbine product range has been designed for both professional and amateur athletes participating in sports and fitness activities ranging from triathlon, cycling, running, and non-impact sports to elite training environments and general workout activities.

“Trisports are a well-respected wholesaler with a long history of success in the sector,” Rhinomed VP Global Sales Matt Hurle said.

“Partnering with them to bring the Turbine to the Japanese market is a great step forward for our company.

“We are excited about the Japanese market opportunity for the Turbine.

“This step into the Asian market is reflective of the increasing interest and involvement in cycling and triathlon from a market with a rich history in sport.”

The distribution agreement was secured during the 2014 Interbike exhibition in Las Vegas, USA.

Trisports said it will start wholesale distributing the Turbine immediately across Japan.

Email: info@rhinomed.com.au

Website: www.rhinomed.com.au

AWE claims new onshore gas discovery in WA

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THE ROADHOUSE BOWSER: AWE Limited (ASX: AWE), as Operator of the L1/L2 Joint Venture, announced initial Contingent Resource estimates for the Waitsia discovery (formerly Senecio Deep) located in the north Perth Basin.

After initial analysis of data from the Senecio-3 well, and the existing 3D seismic, AWE has estimated the Kingia/High Cliff Sandstone intervals in the Waitsia Field have gross Contingent Resources in the range from 65 billion cubic feet (Bcf) to 1170Bcf, with a best estimate (2C) of 290Bcf.

The company explained the presence of a significant quantity of potentially moveable hydrocarbons is indicated by strong gas shows, petrophysical analysis and pressure data.

Net to AWE, the combined Senecio and Waitsia fields represent a best estimate (2C) of 180Bcf of gas.

 

Location Map for the Senecio and Waitsia fields. Source: Company announcement

 

“This is a fantastic result for AWE, the local Mid West community and for the people of Western Australia,” AWE managing director Bruce Clement said in the company’s announcement to the Australian Securities Exchange.

“The discovery in the deeper Kingia and High Cliff Sandstones has opened up an exciting new and substantial gas play in the north Perth Basin.

“AWE believes the Senecio/Waitsia discovery could represent the largest onshore conventional gas discovery in Western Australia since the Dongara gas field was discovered in the 1960s.

“Initial evaluation of the Senecio and Waitsia fields has identified 360Bcf of gross Contingent Resources, which could be brought onto early production, utilising existing gas plant and pipeline infrastructure just seven kilometres from the Senecio-3 location.

“There is also substantial upside to this initial estimated gas volume that could be realised by successful appraisal of the Waitsia discovery and exploitation of the unconventional gas potential identified in the Carynginia Shale and the Irwin River Coal Measures.

“We are now focusing on flow testing of Senecio-3 to establish commercial viability and the potential early, low cost development of the Senecio and Waitsia fields.

“If successful, this could deliver significant additional gas into the Western Australia domestic market and provide substantial value to AWE shareholders.”

AWE said further evaluation and appraisal will be required to more accurately define the size of the accumulation and the lateral extent of the conventional and tight gas bearing sands.

It also noted that the Kingia/High Cliff Sandstone interval has not been previously penetrated in this part of the basin and considers this to represent a new play with substantial upside and follow-up potential.

The Joint Venture partners in L1/L2 are: AWE Limited (Operator) 50 per cent and Origin Energy Resources (ASX: ORG) 50 per cent.

Email: awe@awexplore.com

Website: www.awexplore.com

What the Analysts Say

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WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.

Website: www.breakawayresearch.com

Company:  Volta Mining (ASX: VTM)

Volta Mining (ASX: VTM) has a quality iron ore exploration portfolio located within highly-prospective regions of the Pilbara region of Western Australia.

A recently completed ‘stage-1’ RC drill program has identified significant widths of DSO (Direct Shipping Ore) quality iron ore mineralisation from surface and up to 128 metres vertical depth, interpreted to be an extension of the neighbouring 124 million tonnes at 60.3 per cent iron Sirius deposit which abuts the licence boundary.

Volta Mining has a 100 per cent interest in four licences prospective for iron ore, located in the Pilbara and a further two licences also prospective for iron ore, located in Gabon.

The most advanced project and the priority for the company is the Hancock Ranges iron ore project which hosts three nearby exploration licences, all of which are surrounded by iron ore ‘heavyweights’.

Immediately east of Volta’s licence, Brockman Mining (ASK: BCK) has delineated a 124 million tonnes Resource of high-grade, DSO type, haematite mineralisation. Interpretation of the local geology suggests the Boolgeeda Formation (which hosts the iron mineralisation) continues to the north-west into Volta’s exploration licence.

A ‘stage 1’ drill program has recently been completed which identified significant widths of DSO mineralisation from surface (and up to 128m vertical depth) with assays intersections in the range of 60 to 64 per cent iron.

Volta Mining has a very capable board with a proven track record in iron ore exploration and development; however, the prospectivity and strategic location of Volta’s licences also make the company a potential takeover target.

With an EV of $12.6 million, significant opportunity exists for further valuation upside.

Website: www.hartleys.com.au

Company: Cassini Resources Limited (ASX: CZI)

West Musgrave – Approvals In, Drilling Commenced

Cassini Resources recently received the clearing permits from the Department of Mines and Petroleum (DMP) for on-ground exploration to commence over the West Musgrave nickel-copper project in Western Australia.

The company has mobilised two reverse circulation (RC) rigs to site and drilling is now underway.

The initial drilling will target known zones of nickel-copper massive sulphide at relatively shallow depths within the Nebo deposit.

The aim of the RC drilling program will be to test the mineralised continuity of the higher-grade zones at Nebo-Babel, while increasing resource confidence and extending mineralisation.

The plus-25,000 metre program, will drill to an average depth of approx. 250m and we would estimate (assuming favourable drilling conditions) that 2 holes will be completed every 3 days, providing a strong flow of news for the 3 month drilling campaign.

In addition, a diamond drilling program (6-8 large diameter holes) is expected to commence in mid-October to collect representative samples for metallurgical testwork.

The diamond drilling program has been planned to obtain representative samples for the seven main ore types at Nebo-Babel.

Cassini has a healthy exploration budget, spending in the order of $4.5 million up until the end of March 2015.

Cash remains strong at an estimated $7.5 million.

Drilling at Succoth to progress geological model

Towards the end of the 2014 field season, Cassini is planning to drill a number of RC and diamond holes at the Succoth prospect.

The copper-rich deposit is located approx. 13km from Nebo-Babel and provides Cassini with a potential co-development opportunity.

The drilling program at Succoth will progress the geological understanding of the deposit and focus on the high-grade zones which are near-surface.

Infill and extensional drilling in the coming months should result in the definition of a maiden resource, which we would expect to be released late CY2014/early CY2015.

Our preliminary modelling suggests the Succoth resource may be in the order of plus-10 million tonnes at mineable grades (albeit higher cost).

Previous drilling by BHP included drill intercepts greater than 100m with copper grading around one per cent copper with lower grade nickel (approx. 0.07 per cent nickel) and some PGMs (around 0.3g/t platinum and palladium).

Prior to the commencement of drilling at Succoth, a DMP clearing permit will need to be granted, which the company expects to receive in early October.

With drilling now commenced at Nebo, first assays could be received as early as late September, which due to the nature of the drilling we would expect to be positive and well received by the market.

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.

The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.

Fund Raising across the Boards

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THE FUND RAISER: A mixed bag of methodology on the fund raising front this week.

Placement & SPP

Valence Industries (ASX: VXL) has received commitments from Institutional and sophisticated investors for a placement of new shares to raise $12 million (before costs) at an issue price of 70 cents per share.

A Share Purchase Plan will be offered to all eligible shareholders at a price of 70 cents per share.

The funds raised from the placement and SPP will be used to advance the company’s programs for growth including:

Optimising the company’s feasibility study in order to realise maximum benefits from the high-grade graphite mineralisation across the company’s existing JORC (2012) Mineral Resource and a recently identified new area of mineralised pegmatite.

Providing funding flexibility for early Phase II expansion works which may include preparation of Uley Pit 2, baseline civil work, preparatory infrastructure, and longer lead time orders; and

For general working capital purposes.


Placement by Caitlyn Limited

Azumah Resources (ASX: AZM) has advised that existing shareholder Caitlyn Limited is investing an additional $1.2 million in the company reinforcing its commitment to assist Azumah advance its Wa gold project in north west Ghana, West Africa.

The funds will be provided via the issue of 30 million new ordinary Azumah shares at 4 cents each and, together with Caitlyn’s existing shareholding of 20 million shares, will elevate it to become Azumah’s largest shareholder at approx. 13 per cent.

Azumah’s working capital will increase to over $4 million with the new funds being applied to complete a Feasibility Study, scheduled for Q4 2014, and to drill several high-priority exploration targets.

“The increased commitment by Caitlyn provides a strong endorsement for the Wa gold project and complements our other key investors and project participants, Ausdrill and Macquarie Bank, to create a powerful alignment of interests,” Azumah Resources managing director Stephen Stone said.

Caitlyn is controlled by Indian industrialist Mr Agnivesh Agarwal who is chairman of United Arab Emirates-based gold refiner Fujairah Gold FZC, a 100 per cent-owned subsidiary of UK listed mining house, Vedanta Resources plc, of which Agarwal’s family is the major shareholder.

A Subscription Agreement also provides Caitlyn with the opportunity to participate in a project development funding package structured by Azumah.

If Caitlyn decides to not participate, it has agreed not to use its shareholding to block progress of the funding or any related corporate transaction.

An anti-dilution provision allows Caitlyn to maintain its 13 per cent equity holding for the next 12 months and a standstill undertaking prevents Caitlyn exceeding a 19.99 per cent holding for three years.


Capital Raising

King River Copper (ASX: KRC) announced it is completing arrangements for a capital raising of $900,000 at 4.5 cents per share for the issue of 20 million shares from sophisticated and professional  investors.

The capital raising will be undertaken in two tranches with the first tranche for 13,796,004 shares to raise $620,820 to be issued upon completion of the documentation and the second tranche for 6,204,005 shares to raise $279,180 to be completed upon shareholder approval.

The company’s phase 2 exploration program drilling is expected to recommence the week beginning September 22, which is hoped to maintain momentum in the search for high-grade mineralisation within a ‘dry weather drilling window’.

These funds will be used primarily for exploration activities and working capital.

Gruyere maiden promises more to come

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THE INSIDE STORY: When you want to stand out in a crowd of your peers it is always wise to make an announcement that will pull the maximum amount of focus in your direction.

That’s exactly what Perth-based gold exploration play Gold Road Resources (ASX: GOR) did at the 2014 Diggers & Dealers Forum in Kalgoorlie.

Gold Road sent a buzz around the conference floor by announcing it had finalised the Maiden JORC 2012 Mineral Resource estimate for the Gruyere deposit, located on the company’s Dorothy Hills Trend at Yamarna, Western Australia.

 

The Mineral Resource for Gruyere came in at 96.93 million tonnes at 1.23 grams per tonne gold for a total 3.84 million ounces of gold.

To put these numbers in perspective it is worth noting the last gold discovery of a similar size to be made in Australia was seven years ago, which was the Tropicana discovery of Independence Group (ASX: IGO)/Anglogold Ashanti (ASX: AGG) Joint Venture.

“Obviously we all know how that has grown since then,” Gold Road executive chairman Ian Murray told The Resources Roadhouse on a site visit before the conference.

“These big deposits are becoming rarer and rarer to discover – globally”.

“But, from a Gold Road perspective – we own approximately 5,000 square kilometres of the Yamarna Belt and the Gruyere deposit is only one target within one of the Gold Camp Targets on the Belt”.

“We believe there are a lot more of these discoveries of this scale to be found within our tenements so we just have to keep doing what we have been doing and find more of them.”

There are other numbers that make the maiden 3.84 million ounce resource at Gruyere an even more remarkable achievement.

The company’s exploration team – led by exploration manager Justin Osborne – completed the estimate in only 9.5 months from the initial discovery on 14 October 2013.

At approximately 400,000 ounces per month – or approximately 100,000 ounces per week, Gruyere has a discovery cost of around $7 million – or less than two dollars per ounce.

When this Maiden Mineral Resource is combined with those of the company’s Central Bore and Attila‐Alaric deposits, it increases the Yamarna Belt’s gold endowment to over five million ounces.

“We will continue with our efforts to grow the Gruyere Maiden Mineral Resource, to find additional gold mineralisation along the Dorothy Hills Trend and to test the other Gold Camp Targets within the Yamarna Tenements, with the aim of unlocking the full gold potential within the Yamarna Belt,” Murray declared.

Staying true-to-form, Gold Road wasted very little time after the Diggers & Dealers Conference to announce results from a program of Aircore drilling at the Toto prospect, just three kilometres south of the Maiden Gruyere Resource and along the same geological trend.

 

The Aircore program was designed to test for indications of bedrock gold mineralisation and systems below Interface Geochemical anomalies Gold Road had defined earlier this year.

It didn’t disappoint and subsequently identified three new bedrock targets: Toto 1, 2 and 3.

The targets have a combined six kilometres of strike extent, which the Company intends testing with a program of Reverse Circulation (RC) drilling scheduled to commence in October 2014.

Toto 1 measures 2.2 kilometres north to south and up to 200 metres wide with geological and geochemical similarities to the Gruyere deposit.

Toto 2 measures 500 metres from north to south and 300 metres east to west, and is associated with gold anomalism on the margins of a structurally complex ‘Ziggy’ Monzonite unit.

Toto 3 measures three kilometres north to south and up to 300 metres wide, and is associated with gold anomalism coincident with a discrete magnetic low feature parallel to the trace of the main Dorothy Hills Shear Zone.

“That the Aircore drilling was able to so quickly identify three bedrock targets at Toto, less than three kilometres south of the 3.84 million ounce Gruyere gold deposit, has provided us with even more encouragement in regards to what we are yet to learn about this Trend,” Murray said.

“We consider these results to be further evidence the Dorothy Hills Trend is a fertile gold system, with more discoveries possible within this untested area”.

It would be fair to say Gold Road has developed an uncanny ability with the drill bit.

A second RC program at the Minnie Hill South prospect on the South Yamarna Joint Venture with Sumitomo ‐ confirmed a previously encountered high‐grade gold discovery.

This program is fully funded by Sumitomo as part of its earn‐in commitment under the terms of the JV.

The JV carried out an initial RC program at Minnie Hill South in April 2014, comprising six drill holes, from which anomalous gold mineralisation was reported in five holes with a best intercept of 12 metres at 4.65g/t gold from 135 metres.

A follow-up program of 23 RC holes was conducted between June and July 2014, which was designed to intersect the mineralised structure along strike and down dip of the earlier high‐grade results.

This drilling subsequently returned anomalous gold mineralisation in 12 of the 23 drill holes.

The new RC holes intersected the same differentiated dolerite package and associated mineralised shear system that had been encountered by the original discovery holes.

This, Gold Road determined, was confirmation the gold mineralisation extends over an area approaching one kilometre in strike length.

“It doesn’t get much better than seeing the first prospect tested with RC drilling, within the first Gold Camp Target to be tested in the South Yamarna JV area, has defined gold mineralisation within a very prospective differentiated dolerite over nearly one kilometre of strike and a down dip extent of up to 250 metres,” Murray said.

“This bodes very well for further drill testing of this prospect and other prospects in the South Yamarna JV.”

Gold Road’s intention is to further define the stratigraphy of the dolerite package at Minnie Hill South utilising geochemical and petrological sampling.

This is anticipated to assist in the identification of the dolerite’s internal zonation and its control on mineralisation, which in turn will enable specific targeting of particular prospective units during future drilling campaigns.

Gold Road is now considering drilling a diamond drill hole designed to intersect the entire stratigraphic sequence and dolerite zonation.

This could be carried out in late 2014 to provide some drill core to assist the company with these studies.

Not wanting to let the drill bit cool down, Gold Road completed a program of Regional Interface Rotary Air Blast drilling, which identified large areas of coherent gold anomalism throughout the Riviera‐Smokebush Gold Camp Target.
The RAB drilling identified multiple areas with prospective gold geochemistry, highlighting anomalies with gold grades greater than 10ppb with coincident elevated levels of pathfinder elements such as arsenic, molybdenum and copper.

The four strongest anomalies covered large areas of one kilometre by two kilometres with peak gold values ranging from 30 to 190ppb.

“A first pass regional sampling program identifying further large coherent gold anomalies in a new, untested Gold Camp Target is extremely encouraging,” Murray said.

“We are confident this could very well lead to further exciting gold discoveries within the Sumitomo funded South Yamarna JV area.”


Gold Road Resources Limited (ASX: GOR)
…The Short Story

HEAD OFFICE
22 Altona Street
West Perth WA 6005

Ph: + 61 8 9200 1600
Fax: +61 8 9481 6405

Email: perth@goldroad.com.au
Website: www.goldroad.com.au

DIRECTORS
Ian Murray, Ziggy Lubieniecki, Russell Davis, Martin Pyle, Tim Netscher

MAJOR SHAREHOLDERS
Van Eck    6%
Minco     7%

Swala Energy awarded Zambia exploration Block

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THE ROADHOUSE BOWSER: Swala Energy (ASX: SWE) announced its 93 per cent-owned subsidiary company, Swala Energy (Zambia) Limited, has been formally awarded hydrocarbon exploration rights over Block 44 in the Republic of Zambia.

The company announced in May it had been offered exploration rights over Block 44 and was awaiting the formal award of the rights from the Ministry of Energy.

Block 44 lies in the southern part of the country and covers an area of 6,000 square kilometres on the margins of the Karoo-aged Kariba basin.

 

Location of Block 44 over free-air gravity map. Blue areas indicate sedimentary basins. Source: Company announcement

 

During the first contract year Swala indicated it intends to reprocess and reinterpret the legacy seismic data as part of its work program.

Under the provisions of the award, Swala may withdraw after each of the first two years of the contract should the work conducted not confirm the basin’s prospectivity.

“We are delighted with the award of Block 44 which, as previously advised, expands Swala’s asset portfolio into a potential hydrocarbon region with large energy demand,” Swala Energy CEO Dr. David Mestres Ridge said in the company’s announcement to the Australian Securities Exchange.

“The company looks forward to starting its technical operations and to the active management of this new licence.”

Website: www.swala-energy.com

Orthocell receives Australian patent for rotator cuff tendon injuries

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THE ROADHOUSE PHARMACY: Orthocell Limited (ASX: OCC) has been granted an Australian patent covering use of biological materials to repair damaged tendons described as ‘Tenocyte Containing Bioscaffolds and Treatment Using the Same (PCT/AU2008/000583)’.

Orthocell explained the patents protect its intellectual property for the preparation of bioscaffolds and tendon stem cells to treat rotator cuff tears in a patient’s shoulder.

This intellectual property further protects Orthocell’s tendon regeneration technology known as autologous tenocyte implantation (or Ortho-ATI™).

“This is further validation of Orthocell’s innovation and leadership in the area of regenerative medicine and in particular the regeneration of human tendon tissue,” Orthocell managing director Paul Anderson said in the company’s announcement to the Australian Securities Exchange.

The patents relate to the methods Orthocell uses to:

Cultivate and grow a patient’s own tendon cells, known as tenocytes;

Seed a scaffold with the tenocytes; and

Implant the tenocyte-seeded bioscaffold close to the rotator cuff tear.

The company said the Australian patent around the process follows patents already granted in New Zealand, Singapore and China.

Rotator cuff tendon tear is a common injury caused by the overuse tendons in the shoulder that is most commonly seen in athletes and work-related and other overuse activities.

While surgical procedures can be effective in mechanically stabilising rotator cuff tendon tears, new ways to treat the injury are very much needed as success rates for mechanical stabilisation alone to repair failed repairs are very low.

Up to 40 per cent of rotator cuff stabilisation surgeries eventually fail as the underlying pathology of the tendon, including insufficient viable tendon repairing cells or tenocytes, are absent.

Orthocell claims its ATI technology in conjunction with a stabilisation will support repair and regeneration of the tendon.

Oil discovery adjacent to Sun Resources’ Jack Howe #1H

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THE ROADHOUSE BOWSER: Sun Resources (ASX: SUR) announced that EOG Resources Inc. reported a 24-hour flow rate for the Zeus #1H horizontal Lower Woodbine well.

The well is adjacent to the east of the Jack Howe #1H well location within Sun’s Normangee oil project.

Sun (50 per cent WI and Operator) has contracted the Nabors Drilling USA LP Rig #53 to re-enter the existing vertical pilot well bore at the Jack Howe #1H well location and operations have commenced there.

Sun said EOG reported a 24-hour flow rate of 299 barrels oil, 150 mcf gas, and 184 barrels of water was recorded on 6 August 2014 but was preceded by the flow back of 23,860 barrels of oil prior to making the report.

Sun staff observed that EOG’s multi-stage frac job at Zeus #1H was completed in mid-June 2014.

Sun claimed therefore, an average 30-day IP rate can be estimated across approximately 50 days of flow back, giving a 30-day IP of at least 500 boepd.

The oil tested was measured at an API gravity of 38 degrees and a gas-to-oil ratio (GOR) of 501, measured on a 22/64ths choke (8.7mm).

Email: admin@sunres.com.au

Website: www.sunres.com.au