2010-10-19-2010-10-18

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
MM
Description

Entered two LA JVs, one with 15% WI in a prospect in Garden Island Bay Field in Plaquemines Parish and another for 40% WI in a prospect in Leeville Field In Lafourche Parish.

Dune Energy Inc., Houston, (OTCBB: DUNR) has announced two South Louisiana drilling joint ventures.

In Garden Island Bay Field in Plaquemines Parish, Louisiana, subsidiary Dune Properties Inc., together with two industry partners, plans to drill a 19,500 feet exploratory subsalt well to test potential Miocene pay sand. Potential unrisked reserves are estimated to be in excess of 100 million barrels of oil equivalent (MMBOE). The prospect is targeting sands of similar age and structural settings to Pompano Field in Viosca Knoll 989/990 and Mahogany Field in Ship Shoal 349. The Pompano and Mahogany fields are in federal offshore waters approximately 50- and 125 miles respectively from Garden Island Bay Field, which is in the state waters of Louisiana.

The well is anticipated to spud in January of 2011. Dune will initially have a 15% working interest in the prospect, escalating to an approximate 26% working interest following the first 3 MMBOE of gross production. Dune will fund its proportionate share of drilling costs through cost recovery. Dune maintains its 100% working interest in all existing production from the field and in all lease acreage, with the exception of 9,000 acres associated with this prospect that is beneath the salt dome and at depths greater than 12,000 feet.

In Leeville Field in Lafourche Parish, Louisiana, Dune plans to sell 60% of its non-productive, leasehold interest to a private exploration and production company for $5 million. The company intends to form a joint venture to further exploit undeveloped opportunities within the field. Dune will have a 40% working interest in this venture.

Dune president and chief executive James Watt says, "These projects expose our shareholders to the significant exploratory upside within our prospect base. Success in these ventures could position the company to add new reserves and production for 2011 and beyond."