On the 14 August 2017, The Board of Sun Resources NL (“Sun” or “the Company”) announced that the Company and Pinnacle Exploration Pte Ltd (“Pinnacle”) secured a new oil project through bidding on open acreage in the inland waters of the State of Louisiana, USA. The parties named the field “Bowsprit”.
On 29 July 2019 Sun announced the Company has agreed to acquire Pinnacles 50% interest in the project and move to 100% working interest.
Details of the Louisiana Oil Leases
Following the completion of the buyout, Sun will hold and operate both Bowsprit Petroleum Leases at 100% working interest, covering a total of 1,154 acres in the Breton Sound Area of Louisiana.
The Leases are located approximately 70km southeast of New Orleans in approximately 3 meters of water. There are 14 historical wells, drilled between 1952 and 1982, within the Leases and extensive existing 2D and 3D seismic over the Leases. The Leases are near the boundary of St Bernard and Plaquemines Parishes that covers the transition zone from onshore to the federal waters offshore Louisiana. The region is a prolific hydrocarbon province, the majority of exploration and production occurred in the 1960’s and 1970’s and it is estimated that the two Parishes have produced over 1.2 billion barrels of oil and 5.2 trillion scf of gas.
Sun has conducted extensive internal work assessing the project, based on public domain and purchased data. Sun has had three independent consultants review the project and verify its potential, and RISC Advisory Ltd has probabilistically estimated the resource potential of the field.
Bowsprit is assessed to contain an undeveloped conventional Miocene aged oil sand at a depth of approximately 7,400ft (2,255m) that is located above a deeper 9,500ft deep gas and condensate field that was developed in 1960s by Shell and produced through to early 1990s. Consequently, the Bowsprit field contains 14 vertical well penetrations and has demonstrated producible oil. One 20 to 50ft thick oil sand was flowed successfully from four vertical wells and produced approximately 75,000 bbls of oil and approximately 1 Bscf of gas was produced from an overlying sand at 7,200 ft. Limited to vertical well technology of the day, full field development was not commercially practical at the time (initial well production rates of ~100 bopd declining to ~40 bopd). The whole area was relinquished by the former owners in the 1990s prior to the advent of horizontal drilling.
Sun has determined that following confirmation of the resources with the appraisal well, the Bowsprit structure can be developed with up to five horizontal wells and could potentially be produced through a simple unmanned production platform.
Saratoga Resources drilled and produced two 750ft horizontal wells in an analogous quality, albeit thinner and pressure depleted sand, 12km south of Bowsprit, one of which tested at over 1,500 bopd. Sun anticipates drilling Bowsprit wells with longer horizontal sections, in virgin pressure sand with a thicker column of oil, that should, therefore, meet or exceed the performance of the Saratoga wells.
Sun has conducted 3D geological modelling of the Bowsprit Field in order to select an optimum first well location. A primary well location has been selected and permitting of the well has commenced. The objectives of the first well are:
The 3D model has significantly enhanced the Company’s understanding of the field and has allowed for selection of the first well location. This improved field understanding will also enable Sun to make better presentations to potential farminees and prospective funding parties.
 See ASX release5 April 2018.
It is Sun’s intention to drill the first well as soon as practical, currently estimated to be in Q1 2020. In the interim, Sun will prepare a detailed drilling program (the initial well is estimated to cost approximately US$3.6 million) and seek a farm-in partner or another source of financing to fund the drilling.
If the appraisal well is successful, the well will be suspended as a future producer. It is anticipated that the full field development and first oil could commence in 2020.