On the 22 October 2012, Sun Resources NL (“Sun”) announced that, pursuant to a binding Sale and Purchase Agreement with an unrelated third party vendor, it had purchased a 50% working interest (WI) in a 3,852 gross acre package of oil and gas leases located on the Leon County-Madison County border, Texas, US (Normangee Oil Project). The balancing 50% WI in the Normangee Oil Project was purchased by Amerril Energy LLC (“Amerril”). Sun’s 50% share of the acquisition cost was approximately US$3.3 million, which was met from existing cash reserves. During September and early October 2014, Sun successfully drilled and cased its first horizontal well, the Jack Howe #1H lateral, as Operator (50% WI), to a final measured depth (MD) of 14,707 feet (4,483 metres). On the 9 October 2014 the Nabors Drilling USA LP Rig #53 had been released from the Jack Howe #1H location. The strong oil and gas shows observed in the lateral well bore are consistent with the integrated wireline log and core analysis data from the vertical pilot hole that has confirmed a 250 feet section of oil pay within the “unconventional” Lower Woodbine Target. During the December 2015 Quarterly, Sun announced that the Company continued to conduct operations to perpetuate the Jack Howe leases while planning to frack the Jack Howe #1H well in the Normangee Oil Project. Sun is seeking to reduce the cost of fracking below the 2014 calendar year estimate of approximately US$4 million (100% WI) and is targeting an anticipated 40% reduction in costs for services, in line with falling oil prices and reduced activity in USA-based unconventional plays. The most recent operation on the Jack Howe #1H horizontal well involved perforating the toe of the horizontal well bore with an injection test delivering 3 barrels per minute at a pressure of 4,200 psi. Sun was made aware during the March 2016 Quarter that fresh lease agreements, covering approximately 263 net mineral acres (132 acres net to Sun and), or ~1/3rd of the Jack Howe #1H drilling unit, have been executed between the mineral owners and private company ABRI Advisory Services LLC or ADREW Direct LLC. This has the effect of reducing Sun’s and Amerril respective interests in the drilling unit proportionally. Sun’s attorneys are reviewing the documents recorded and considering options available while Sun retains its rights in relation to lease interests and the well bore. Further to our land update in the March 2016 Quarterly Report, the status of leases in the drilling unit covering the Jack Howe #1H well bore are either in dispute, re-leased to a third party, or require fresh new leases in order to be considered viable for future investment. There is currently no activity planned in the near future, until such time as title can be renewed and clarified across the entirety of the 700 gross acre drilling unit area. As a consequence, the carrying value of the Jack Howe #1H well bore has been written off in the Audited accounts to 30 June 2016. The Board of Sun may take the view later in 2016 or in 2017 that oil prices have firmed sufficiently to reconsider new investment in this area of Sun’s portfolio. In that event, the initial investment will be to acquire new mineral leases in areas previously tested or identified as having significant Lower Woodbine oil potential, including the Jack Howe drilling. As at the 31 December 2016, Sun retains 364 net acres.