Fresh EME Thread......

A bot of the history prior to EME signing up:

Tuesday, 10 January 2006
ASX Announcements
Australian Stock Exchange
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam,

RE: WANDOO JOINT VENTURE, ONSHORE GULF COAST, TEXAS Sun Resources is pleased to announce a strengthening of its exploration activities in Texas, USA on the highly prolific oil and gas prospective onshore Gulf Coast through an essentially ground floor Joint Venture with Wandoo Energy, LLC (“Wandoo”). Wandoo is an experienced, successful group of Houston based Gulf Coast geologists who have exclusive access to an extensive 2D and 3D seismic
data base currently comprising 140 3D seismic data sets (16,300 km2) and 161,000 line kilometres of 2D seismic covering portions of four main producing trends on the onshore Texas Gulf Coast.

One of the problems faced by junior oil and gas explorers in the USA is that there is very little hard geological and geophysical data in state archives which is unlike Australia where it is mandatory to lodge all data as per state licence conditions and also Australian state geological surveys carry out extensive geophysical surveys which are made available to the general public and industry at minimal cost.

This situation in the USA is due to the fact that the majority of mineral and oil/gas rights are usually privately owned and exploration is by agreement between explorer and mineral right owners and
therefore there are minimal requirements with data lodgement with USA state authorities. As a consequence it is difficult to work up plays and test new concepts in the USA without ready access to
basic data, particularly seismic, the main tool used in oil and gas exploration. Generally this means the junior explorer must buy in all seismic data, i.e. carry out his own speculative seismic surveys, usually
2D rather than the more expensive and superior 3D, or buy or licence seismic data from seismic brokers. This means exploration is expensive, restrictive and importantly the opportunity to generate worthwhile prospects is extremely limited.

Sun Resources with Victoria Petroleum (herein termed “Sun Group” for convenience) through their 100% owned USA subsidiaries, completed documentation of a Joint Venture late December 2005 with Wandoo, on the Texas Gulf Coast offshore and onshore 2D and 3D seismic data bank that Wandoo has access to by virtue of its exclusive agreement with the owner of the seismic data bank. Interests in the Joint Venture are Sun Resources 37.5%, Victoria Petroleum 37.5% and Wandoo 25%.

Basic terms of the Joint Venture is that Sun Group will fund six months evaluation of one high graded Texas Gulf coast onshore 3D seismic data set at an all up cost of US$360,000 and has the first right of refusal to earn a 75% Working Interest on any prospects generated within the area of the 3D seismic
data set on a non promoted “ground floor” basis with a further first right to earn additional equity over and above its 75% Working Interest on any prospects generated. To earn a 75% working interest in a prospect, Sun Group will carry part of Wandoo’s 25% Working Interest (10% only) in the first well on any prospect to completion to the tank battery and fund between two US$200,000 and US$500,000 of approved land leasehold acquisition costs (and seismic reprocessing where necessary at cost) on prospects within the area of the 3D seismic data set.

Wandoo is an experienced, successful group of Houston based Gulf Coast geologists who will provide the Joint Venture with people, expertise and technology having for the sake of the agreement, a notional value of US$360,000 and a prospective Texas Gulf coast onshore 3D seismic data set having a further notional value in the range of US$700,000 and US$1,000,000. Wandoo through its land man will also deliver to Sun Group a 77% Net Revenue Interest (“NRI”) in mineral rights to underlying prospect lands of interest from the mineral right owners of the prospect lands and it will be at the discretion of Sun Group to accept a lesser NRI in any prospect lands from Wandoo. Wandoo will have an Over Riding Royalty Interest (“ORRI”) where Sun Group NRI is greater than 77% and it will be on a sliding percentage difference in NRI between Negotiated NRI and Sun Group minimum 77% NRI.

A month of preliminary work on the data base has resulted in the recognition of some interesting prospects and leads, particularly for gas in the range of 5 to 100 BCF in size in prospective stratigraphy/structures at various depths ranging from 1,000 to 4,000 metres in a large 3D data set. This now high graded seismic data set will be subjected to some reprocessing and definitive interpretation,
before prospects are ranked for land acquisition by leasing and subsequent drilling in the next 12 months.

The Wandoo Joint Venture will expose Sun Resources to a choice of drillable prospects of various risked potential on a ground floor basis. The Company can mitigate the drilling risk by farming portion of its current 37.5% working interest and its further right to additional working interest in prospects.
Importantly, which is conditional on performance of the Joint Venture and by mutual agreement with Wandoo, Sun Resources will have the right but not the obligation to participate in further joint ventures with Wandoo on other Wandoo deemed prospective onshore or offshore 3D and / or 2D seismic data sets in the Texas Area of Mutual Interest."



Regards,
Ed.