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Sundance Energy Corp
Symbol C : SNY
Shares Issued 77,788,385
Close 2012-11-16 C$ 0.035
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Sundance farms out 21% WI in Alexander test well

2012-11-19 09:26 ET - News Release

Mr. Jeffrey Standen reports

SUNDANCE ENERGY SECURES FARM-IN PARTNERS FOR ALEXANDER PROJECT, CENTRAL ALBERTA, OBTAINS OCHAPOWACE, S.E. SASKATCHEWAN DRILLING EXTENSION AND MAILS SHAREHOLDER MEETING MATERIALS

Sundance Energy Corp. has entered into participation agreements for a portion of its 50-per-cent-owned, 27-contiguous-section (17,280-acre) Alexander property and is in the process of obtaining a licence to drill a test well at 16-11-56-27-W4M (16A-11 test well). The Alexander property is located just northeast of the city of Edmonton, Alta., and immediately adjacent to a Detrital sand and Alexander sand light oil field that is undergoing continued development by another operator. The farm-out participants consist of a group of arm's-length and non-arm's-length parties.

Pursuant to the terms of the farm-out, Sundance will receive a $120,000 equalization payment from the participants. The participants will then pay 33 per cent of the costs to drill, complete and equip the 16A-11 test well in order to earn a 21-per-cent working interest in the well and the applicable drilling spacing unit. Sundance will pay 17 per cent of the costs to drill, complete and equip the 16A-11 test well, and will maintain a 29-per-cent working interest in the well and the applicable drilling spacing unit. By participating in the 16A-11 test well, the participants will also earn the right to participate for a 17.5-per-cent working interest in future wells drilled on five of the 27 sections (3,200 acres) of land that comprises the Alexander property. Sundance will maintain a 32.5-per-cent working interest in the farm-out lands and a 50-per-cent working interest in the other 22 sections (14,080 acres) of land that comprises the Alexander property. If at any time in the future, a participant declines on its right to participate in its working interest on a well proposed to be drilled on the farm-out lands, the participant will lose all rights to participate in future wells to be drilled on the farm-out lands.

Sundance will be the operator of the 16A-11 test well and will remain the operator of the Alexander property. The 16A-11 test well has been identified utilizing extensive 3-D seismic data and modelling. The 16A-11 test well is primarily targeting light oil production from the Detrital sand formation and secondly light oil production from the shallower Alexander sand formation. Drilling of the 16A-11 test well is planned to commence before calendar year-end.

The farm-out is subject to review and approval by the TSX Venture Exchange.

Ochapowace, southeast Saskatchewan, drilling extension

Sundance also announces that it has obtained approvals from the chief and council of the Ochapowace First Nation to extend the corporation's drilling commitments on IOGC permit No. OP-3293 in southeast Saskatchewan from Dec. 31, 2012, until Dec. 31, 2013. The drilling commitment extension is subject to final approval by Indian Oil and Gas Canada (IOGC).

A drilling licence for the next well to be drilled on the Ochapowace permit, the Ochapowace 16-32-17-3W2M well (16-32 vertical test well), has been obtained, and Sundance is currently in the process of finalizing the surface lease application with IOGC. The 16-32 vertical test well has been identified utilizing 3-D seismic data. The 16-32 vertical test well will be drilled at a location which is approximately 12 metres structurally higher from Sundance's Ochapowace 6-5 vertical test well (drilled and standing cased), which encountered very thick but wet Jurassic-age sands interpreted to be comparable with sands producing economic light oil on proximal lands in the Wapella, Red Jacket and Coothill oil fields. The Ochapowace 6-5 vertical test well also recovered minor amounts of free oil from both the Bakken and Lodgepole formations. Sundance feels that by moving up structure in a more favourable location from the oil shows in the Ochapowace 6-5 vertical test well, the Ochapowace 16-32 vertical test well may be ideally situated to trap hydrocarbons in the Bakken, Lodgepole and Birdbear formations, as well as the shallower Jurassic sands. Drilling of the Ochapowace 16-32 vertical test well is planned to commence in the first quarter of 2013. Sundance intends to drill the Ochapowace 16-32 vertical test well with large enough casing to allow a horizontal leg to be kicked off from the well if a target formation is encountered that warrants horizontal drilling. Sundance owns 100-per-cent interest in the Ochapowace permit and is the operator.

Shareholder meeting

Sundance further announces that it has mailed materials for its shareholder meeting to be held at its office located at Suite 500, 1414 8th St. SW, Calgary, Alta., on Thursday, Dec. 13, 2012, at 10 a.m. MST. The meeting materials have been mailed to all shareholders of record as of the close of trading on Nov. 9, 2012.

In addition to standard annual meeting matters, Sundance will seek shareholder approval to consolidate its common shares, at the discretion of its board of directors, on the basis of up to one postconsolidation share for every 10 preconsolidation shares. Sundance's board of directors does not currently intend to give effect to any share consolidation; however, it wishes to obtain approval to consolidate to provide greater flexibility, if required, to secure financing for the development of its core properties at Alexander, Alberta and Ochapowace, southeast Saskatchewan.

We seek Safe Harbor.

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