SEA Sundance Energy Australia Limited

Sundance Energy Australia Limited (ASX:SEA) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford and Greater Anadarko Basins, reported its unaudited first quarter 2015 results as filed with the Australian Securities Exchange (ASX).

First Quarter 2015 Financial Results

• Revenue for the quarter decreased $1.5 million, or 4.9 percent, to $28.7 million compared to the same period in prior year. 
• Adjusted EBITDAX(1) (a non-IFRS metric) and Adjusted EBITDAX Margin were $22.0 million and 77 percent of revenue for the quarter ended March 31, 2015.  
• The current quarter’s 77 percent Adjusted EBITDAX Margin was relatively consistent with the year ended December 31, 2014 (79 percent), despite a 51 percent decrease in realized pricing for the same periods.
• Further reduced its cash cost structure from $15.13 per barrel of oil equivalent (“BOE”) for the year ended December 31, 2014 to $12.68 per BOE in the quarter ended March 31, 2015 (16 percent reduction).  These cash cost improvements included a $1.49 per BOE reduction in LOE and production taxes, primarily due to several cost saving initiatives in our field operations, and a $0.96 per BOE reduction in general and administrative expenses.
• At March 31, 2015, cash and cash equivalents totaled $13.1 million and borrowings under the credit facility were $143.9 million.  After the transaction discussed below, proforma liquidity at March 31, 2015 was $63 million (excludes $50 million of undrawn contingent commitment). 
• On May 14, 2015, Sundance entered into a credit agreement with Morgan Stanley Bank, N.A. and Morgan Stanley Capital Group Inc. that provides for a $300 million Senior Secured Revolving Credit Facility (the “RBL”) with $75 million available of which $25 million was drawn at closing and a $175 million Senior Term Loan Facility (the “Term Loan”) of which $125 million was drawn at closing and $50 million is available in the form of an undrawn contingent commitment. The RBL has a five year term and the Term Loan has a 5 ½ year term.  The transaction fully retired Sundance’s previous credit facilities.

First Quarter 2015 Highlights

• Net oil, natural gas and natural gas liquids (“NGLs”) production, including flared gas, increased to 862,281 BOE, averaging 9,581 BOE per day as compared to 4,723 BOE per day for the same period in 2014 (102% increase), due primarily to the new horizontal wells brought into production within the Eagle Ford.
• Acquired approximately 13,500 net acres adjacent to the Company’s Dimmit project in the Eagle Ford for approximately $13.4 million creating a 23,000 gross (19,000 net) acre contiguous Eagle Ford project.
• Sundance brought 5 gross (4.0 net) horizontal wells into production during the quarter. 
• An additional 24 gross (14.7 net) horizontal wells were in progress at quarter end, of which 11 gross (10.6 net) were Sundance-operated.  The Company anticipates completing 8 gross (8.0 net) of these wells over the remainder of 2015 while likely deferring completions on the remaining in progress wells to 2016.

Eric McCrady, CEO of Sundance commented, “Although market conditions have recently improved with oil prices moving up almost $15 per barrel, our Company and the industry continue to face a challenging price environment.  Our Company is well positioned to generate significant shareholder value in this challenging environment.  We maintain a low leverage profile with limited development obligations, have a leading cost structure that has improved in the first quarter, and have a highly economic drilling inventory focused on the Eagle Ford that allows us to generate good returns in a low price environment.  Despite this challenging environment, our Company is very well positioned to continue increasing shareholder value.”

All amounts in the following tables are unaudited and presented in US thousands, except where stated otherwise.

The following table reflects production volumes, revenues and pricing compared to the corresponding period in the prior year.

	Three Months Ended March 31,
		2015				2014
Production Summary
Oil (BBLS)		592,964				278,291
Natural gas (MCF)		1,191,702				571,407
NGL (BBLS)		70,700				51,584
Total BOE		862,281				425,110
Average daily production, including flared gas		9,581				4,723
Revenue
Oil	$	26,414			$	26,288
Natural gas		1,624				1,895
NGL		634				1,966
Total Revenue	$	28,672			$	30,149
Realized Product Pricing
Oil priced received (per BBL)	$	44.55			$	94.46
Oil realized price, including oil hedging (per BBL)	$	49.46			$	93.93
Natural gas priced received (per MCF) *	$	2.83			$	5.37
Natural gas realized Price, including natural gas hedging (per MCF) *	$	2.97			$	5.15
NGL realized price (per BBL)	$	8.97			$	38.11
Total price received (per BOE)	$	37.75			$	77.58
Total realized price (per BOE)	$	41.69			$	77.00
* Excludes flared gas of 616,762 MCF and 218,814 MCF for the three months ended March 31, 2015 and 2014, respectively.

The following table summarizes operating costs on an actual and per unit basis.

	Three Months Ended March 31,
		2015				2014
Costs:
Lease Operating Expenses (LOE)	$	3,928			$	3,802
Production Taxes		1,864				1,626
Cash G&A, net of amounts capitalised		3,839				3,117
Total	$	9,631			$	8,545
Costs per BOE:
LOE	$	5.17			$	9.78
Production taxes		2.45				4.18
Cash G&A		5.05				8.02
Total	$	12.67			$	21.98

Additional Information

(1) We define “Adjusted EBITDAX” as earnings before interest expense, income taxes, depreciation, depletion and amortization, property impairments, gain/(loss) on sale of non-current assets, exploration expense, share based compensation and income and gains and losses on commodity hedging, net of settlements of commodity hedging.

The Company reports under International Financial Reporting Standards (IFRS).   All amounts are reported in US dollars unless otherwise noted. 

The Company’s full Unaudited Activities Report for the Quarter Ended March 31, 2015 can be found at www.sundanceenergy.net.  The Company held a conference call, and simultaneous webcast, which is available on the Company’s website at www.sundanceenergy.net. 

The Company’s 2014 Annual Report was filed with the ASX on March 31, 2015 and can be found at www.sundanceenergy.net.

About Sundance Energy Australia Limited

Sundance Energy Australia Limited (“Sundance” or the “Company”) is an Australian-based, independent energy exploration company, with a wholly owned US subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA.

The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford and Greater Anadarko Basins.  A comprehensive overview of the Company can be found on Sundance’s website at www.sundanceenergy.net.

Summary Information

The following disclaimer applies to this document and any information contained in it. The information in this release is of general background and does not purport to be complete. It should be read in conjunction with Sundance’s periodic and continuous disclosure announcements lodged with ASX Limited that are available at www.asx.com.au and Sundance’s filings with the Securities and Exchange Commission available at www.sec.gov/edgar.  

Forward Looking Statements

This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same.

These forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with our the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward looking statements attributable to Sundance, or any of its affiliates or persons acting on its behalf.  Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

United States
Eric McCrady, Managing Director 
Tel: +1 (303) 543 5703

Australia
Mike Hannell, Chairman
Tel: +61 8 8363 0388