Dune Energy Places Smith-East #1 Well on Production
Dune Energy reports that the Smith-East #1 well, located in Denton County, Texas, was placed on production on September 5, 2006. The Smith-East #1 flowed at an initial production rate of 3.4 MMCF/D on an 18/64 inch choke.
Under the terms of Dune's Amended and Restated Asset Purchase and Sale Agreement ("Purchase Agreement") with Voyager Partners, Ltd. ("Voyager"), Dune is entitled to purchase 95% of Voyager's interest in the Smith-East #1 well and the associated oil and gas lease, subject to the satisfaction of the conditions precedent set out in the Purchase Agreement. Should that purchase not close under the terms of the Purchase Agreement, taking into account Dune's funding of the costs of completion operations in the Smith-East #1, Dune will be entitled to receive 40% of Voyager's interest in the Smith-East #1 upon any termination of the Purchase Agreement. Current production will accrue to Dune's future interest in the Smith-East #1, subject to the company's working interest, and will be paid either at closing or upon termination of the Purchase Agreement, as the case may be.
Dune is an aggressive and rapidly growing oil and gas exploration and production company with operations presently concentrated along the Louisiana/Texas Gulf Coast as well as the Fort Worth Basin Barnett Shale.
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