The Australian Robin Bromby put up an article yesterday in The Australian discussing the Shale Gas phenom and how it is changing the USA. The only pickle I see in the story is that they fail to give due credit to Cuadrilla. I mean the story is about the USA, yet the phot file with the arctile is of our cuadrilla rig with the nimbys from the local blackpool group during their protest.
Lets not discount the possibility for their to be environmental issues, but still appreciate that there is a very simple and proven engineering methods to control those risks more than adequately.
Enjoy your court time attention seekers!
The ASX Even the ASX wants to no more about it by today issuing a speeding ticket to Senex energy querying why their share price has risen uncontrollably over the past few days despite them announcing to the world several times over that it's all about the unconventional baby!
Striebs, check out the price difference!
Now where does Cuadrilla sit in all of this, and Lucas for that matter?Lucas' direct and Cuarilla ownership of acreage gives it over 700,000 acres in prospective shale acreage across Europe. Its most advanced the Bowland shale has Lucas with a net interest in 165,000 acres where 7 wells have been drilled around the basins trough and one flow tested.
What did BHP pay for Petrohawk? Yup $12.1 Billion USDees for 1 million acres. Maybe another $4.75 billion for 487,000 acres out of CHK's stake in the USA OK.
On a comparitve (and mature basis) that values the Lucas Cuadrilla stake at between $6.82 Bn and $8.47 Bn. Nope those numbers are not forged.
There are some big and obvious differences, regulatory for one, and the other being price... Henry is currently about $2.70 GJ compared to the UK's $8.30 for 3Q2011. That's right, it's only 3 times the US price.
$8.30/GJ determine from data as 1.825 pence per kWh.
So if the price is triple in the UK than what the Yanks can get our of OK and TX, then what does that do to the NPV's for Cuadrilla. Yup, it pushes them to the top end of any valuation scenario. And... for that matter, consider also the thicker shale sequences that we have hit at PEDL165.
The big question we must have oozing out of our lips, is what doe sthe DECC think of this economy transforming fuel?
Goodluck shale hunters,the biggest and the best is right under your nose, imvso!
Robin Bromby From:The Australian January 12, 201212:00AM
Shale gas is said to be turning the US back in to an industrial powerhouse.
IT'S the elixir of economic life, providing business longevity and renewal and -- apparently -- about to turn the US back into an industrial powerhouse.
That's the seeming energy miracle that is shale gas. It almost calls for a shout of "hallelujah", if you believe all that is being said.
Unless you live near a project and worry about your health, or you live in Australia, where the shale gas story has hardly begun.
Other than that, it's the smell of roses all around. The old steelmaking town of Youngstown, Ohio, has lost half its population over the past 50 years. Now, though, Youngstown Steel & Tube is building a $US650 million ($632m) plant there, all made possible by cheap shale gas from Pennsylvania and West Virginia.
Everyone wants in. Marubeni is paying $US1.3 billion for a slice of the Eagle Ford shale in Texas (where BHP Billiton already sits, thanks to its Petrohawk Energy takeover). Sinopec has laid down $US2.2bn to get in on the North American shale scene while France's Total is coming up with $US2.3bn in a deal with Chesapeake Energy.
ExxonMobil's latest energy outlook sees global demand for gas increasing by 60 per cent by 2040, with much of that extra supply coming from shale gas via fracture stimulation (or fracking).
PetroChina has already been fracking in the Sichuan Basin with some considerable success. The US Energy Information Agency estimates China's shale gas resource at 1275 trillion cubic feet, the world's largest.
It's the fracking that's the problem. Doctors and some politicians in the US want a moratorium on the practice near populated areas. The fear is that the chemicals (along with water and sand) that are injected to fracture the shale formations and release the gas may be tainting drinking water supplies.
Not that this is an issue in Australia, it seems.
We're at least a decade behind the Americans and don't yet employ the latest US technology for hydraulic fracturing using horizontal wells.
That's the view taken by UBS analysts in a report out this week on shale gas. It's not just the non-existent shale gas service industry here and the isolated locations involved, but the Australian shales seem to be mainly gas with little liquids, meaning not much cream with local gas prices low by US standards.
It's estimated that the US has so far discovered 750 trillion cubic feet of gas in shales, plus 23 billion barrels of liquids in the oil shales. "We believe both those estimates are low," says the UBS report.
It also explains the US seachange. Energy companies there had been net sellers of mature oil and gas fields over several decades.
Not any longer; there's been what they call a great shale land grab going on for seven years, and they expect consolidation to increase this year.
AJL Price at posting:
$1.16 Sentiment: Buy Disclosure: Held
