[LOGO]
DUNE ENERGY, INC.
3050 Post Oak Blvd., Suite 695
Houston, TX 77056
Tel: (713) 888-0895 Fax: (713) 888-0899
February 13, 2007
Ms. Jill S. Davis
Branch Chief
Securities and Exchange Commission
Division of Corporation Finance, Mail Stop 7010
100 F. Street, N.E.
Washington, D.C. 20649
Re: Dune Energy, Inc. (the "Company");
Commission's Response Letter Dated February 6, 2007
File No. 001-32497
Dear Ms. Davis:
This letter is in response to your response letter referenced above. Set
forth below are our responses addressing each of the items set forth in your
letter.
For your convenience, I have numbered the Company's responses below in
accordance with the comments received in your letter.
Form 10-KSB for the Fiscal Year Ended December 31, 2005
Engineering Comments
1 Please revise your document to include all the required information
by SFAS 69 and Industry Guide 2. This includes:
o The amount of net oil and gas production for each of the last three
years
o The average price realized for oil and gas in each of the last three
years;
o The amount of gross and net productive oil and gas wells;
o Gross and net developed and undeveloped acres;
o Your drilling success in each of the last three years for
exploration and development drilling;
o The per unit operating costs of the last three years;
o Other required information.
Response: Most of the required information by SFAS 69 is included in Note
13 to the financial statements. We will include all the required
information by SFAS 69 and Industry Guide 2 as it applies to small
business issuers engaged in oil and gas producing activities in future
filings.
Ms. Jill S. Davis
Securities and Exchange Commission
February 12, 2007
Page 2
Supplemental Oil and Gas Information, page F-15
Oil and Gas Reserve Data, page F-15
2 We have reviewed your response to prior comment 19 of our letter dated
December 22, 2006. As previously requested, please confirm that in future
filings you will provide appropriate explanations for significant changes
that appear in your reserve table. Please see paragraph 11 of SFAS 69.
Response: We confirm that in future filings we will provide appropriate
explanations for significant changes that appear in our reserve table.
3 We have reviewed your response to prior comment 21. We believe that only
two parallel and adjacent locations to a producing horizontal well can be
booked as proved undeveloped reserves. Please revise your reserve estimate
to confirm to this guidance or tell us why you believe you have
demonstrated a certainty of production with more locations.
Response: Even though our response to your original comment 21 indicated
that our independent engineers generally classify up to four offset
locations as proved undeveloped we can confirm that only two parallel and
adjacent locations to a producing horizontal well were booked as proved
undeveloped reserves. Furthermore, we confirm that in future filings we
will book only two parallel and adjacent locations to a producing
horizontal well as proved undeveloped reserves.
4 Tell us the impact of limiting your proved undeveloped locations to only
two parallel and adjacent locations to a producing horizontal well on your
proved undeveloped reserves and on your financials, as of December 31,
2005. We may have additional comments.
Response: We only classified two locations; therefore, there will be no
impact from limiting our proved undeveloped locations to only two parallel
and adjacent locations to a producing horizontal well on our proved
undeveloped reserves and on our financials, as of December 31, 2005.
In connection with responding to your comments, we acknowledge that:
o we are responsible for the adequacy and accuracy of the disclosure in the
filing;
o staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the
filing; and
Ms. Jill S. Davis
Securities and Exchange Commission
February 12, 2007
Page 3
o we may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the
United States.
Very truly yours,
DUNE ENERGY, INC.
By: /s/ Hugh Idstein
-----------------------
Hugh Idstein, CFO