I am a long time Sundance holder and recently I sold about 30%...

I am a long time Sundance holder and recently I sold about 30% of my SEA and bought TXN. I figure I will get the Talon stock for free and still have my original SEA stake after the merger. If there is a better offer for TXN, I will make money on those shares.

Just to provide a bit of background for you, in case the Sundance offer holds.

Sundance mgmt has done a great job of finding acreage cheap and monetizing it. They gathered a little over 8,000 acres in the Bakken VERY EARLY. They couldn't afford to drill it themselves so found BIG drillers to take most of the risk. This provided SEA with quality partners who had the finances to get the best subcontractors for the drilling work and enough clout to get equipment and men when they are both in short supply in the Bakken. Sundance has small JV interests in many dozens of Bakken wells, each costing 3 to 10 million.

This non operator mode was very low risk but production was slow to ramp up. As Sundance has gotten healthier, they have taken bigger exposures in the wells but they were limited in how much they could expand their JV %. So they sold the best acreage for 172million for 3900acres.

Their first expansion after the Bakken was the Niobrara. Again, they bought the land cheap and then sought bigger JV partners but kept some land for themselves to drill and develop. The Niobrara has proven to be marginally economic and Sundance will likely exit their Niobrara positions over the next couple of years.

Next they went to the Mississippian, a play that rivals the EFS in economic returns. They built up a 40,000 acre position in their first year and anticipate adding another 40,000 acres in 2013. They are operating this play and expect good increases in production.

They still need to deploy the cash from the Bakken sale to defer taxes so Sundance is not done yet with land/company acquisitions.

From this brief history, I think you can tell that Sundance is very smart about land acquisitions. They are careful and have advanced the company from a non operator with limited exposure to each well to an operator who is drilling by themselves in the Mississippian. They don't overpay for land and if they make a mistake, they move on. The Niobrara isn't a big failure because they sold enough acreage early on to EOG and others to get their acquisition costs back so anything they sell for now is additional profits.

I think Sundance is set for a big jump in production due to their good land positions in the Mississippian and hopefully the EFS. They are projecting 5,000boepd by 2015. That's a big leap from 700boepd now but they have cash and will likely sell the rest of their Bakken acreage in the next year or two to finance more drilling on their higher WI land.

As Texon has found, you need both land and the cash to drill it out. I think Sundance could make Texon holders a lot of money over the next few years. They are patient and not huge risk takers but I think that's the way to go in this economic environment. Good luck and let's hope everyone makes a lot of money!