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Hotazel

I listened to all of the testimony of the Liberty Oil dude (but failed to get through all of the q&a with the euro-bureaucrat).

My understanding of what the chap had to say was that he was not interested in getting involved in the UK shale scene as he believes that the biggest killer for shale exploration is regulatory and process delays and he does not think that the delay kinks have been knocked out of the UK system yet. (same problem with Fat Barry in NSW: open-ended delays have killed the csg sector).

You only have to listen to the euro-bureaucrat's session to realise that the Liberty Oil bloke was on the money. Not only do the poms have to get the locals onside, not only do they have to line up all the pollies at a national level and go through their own appeals system (where the anti-development groups explicitly use the strategy of delay) but they also have the bureaucrats in Brussels attempting to clog up the approvals process even more.

He also said that shale exploration does not suit big operators like Shell as successful drilling requires lots of suck and see exploratory drills and lots of fast paced innovation as each shale field is most probably uniquely different from previously drilled fields. The fact that Dart is getting some big French companies to pay for initial drilling is good in the short to medium term but is not so encouraging in the longer term.

As an aside the Liberty Oil chap implicitly supported the strategy used by Dart's previous management: he noted that depending on where shale gas fields are located in the US can mean that the gas extracted can be worth significantly more or less (he talked that well located gas can be worth to the producer double that of isolated gas). People might remember that Dart's explicit strategy was to locate unconventional gas reserves close to high paying markets even if that meant going after relatively smaller fields (this is in contrast to Arrow's strategy of locating massive gas fields in areas isolated from high paying markets).