Beanbush successful., page-385

For all the sensative egos these should suffice

Cooper Basin was an established oil and gas province in the remote desert, connected to the east coast market by an existing pipeline, with processing at Moomba.

Geoscience Australia was more cautious; it has never backed the US EIA number, and its 2014 Energy Resource Assessment notes simply that Australia’s shale gas resource “remains to be defined” and the Cooper Basin is “being explored for thick basin-centred gas accumulations”.

Nevertheless, the interest of US oil majors was piqued and in 2013 as Chevron entered a joint venture with established Cooper Basin player Beach Energy and junior Icon Energy.

Fast forward two years, and as the The Australian Financial Review has reported, results have been disappointing, with worries about the rapid decline in gas flow-rates from the exploration wells drilled so far. And drilling costs have been higher than expected, with each well costing $20 million. A similarly disappointing experience led ConocoPhillips and PetroChina to pull out of exploring another onshore shale gas target, WA’s Canning Basin.

Outgoing Beach managing director Reg Nelson was still talking up the potential a fortnight ago, telling the AFR last month that the Cooper Basin could hold up to 600 trillion cubic feet of gas?—?of which 10%-20% could be recoverable?—?leading to speculation that Chevron might pull out of the joint venture by March. In the market fallout since last Thursday’s OPEC meeting that possibility only looms larger, and this is reflected in the share price of the Cooper Basin players, which have fallen in line with the rest of the energy sector: Beach, which was trading over $1.70 in August, is now trading at $1; junior Drillsearch’s shares have halved since late July and were down by a quarter by Monday’s close, at 83 cents; partner Senex plunged over 30% and is now at 28 cents. Tuesday’s AFR predicts a long-awaited consolidation of the Cooper Basin players.

Put simply, the appetite for remote, expensive, longer-dated shale gas exploration programs could be disappearing fast. It has been widely observed that the Saudis’ objective at last week’s OPEC meeting was to undermine US shale oil production, whatever the cost. Our own shale gas boom could be so much collateral damage