Yeeda Oil hoping to cap basin's potentialBY: TIM MORRIS From:...

Yeeda Oil hoping to cap basin's potential

BY: TIM MORRIS
From: The Australian August 28, 2012 12:00AM

AUSTRALIA'S hydrocarbon industry is dominated by offshore operations. Accounting for more than 90 per cent of domestic production, our most significant oil and gas fields lie off the coast of north Western Australia within the Carnarvon and Browse basins. Carnarvon and Browse together host more than two-thirds of the nation's natural gas reserves, and more than half the oil endowment.

Sandwiched between these two prolific areas lies the 500,000sq km Canning Basin. While covering a similar area to the Carnarvon Basin, the Canning's large onshore component has fostered a more enduring yet frustrating exploration history. Despite more than 90 years of prospecting and 250 wells, the Canning Basin is absent of economic hydrocarbon reserves.

However, following recent advances in extraction technologies, the region has been slated to host Australia's most significant undeveloped shale resource by the US Energy Information Administration.

Renewed interest in the Canning Basin is driving the coming float of Yeeda Oil on the Australian Securities Exchange. The company has the right to earn partial interests in two oil and gas projects in the Canning Basin. As the licences lack hydrocarbon resources, Yeeda Oil's initial focus is exploration.

Proceeds from its listing are earmarked for drilling to satisfy earn-in requirements associated with its projects. As drilling is scheduled to start within the coming year, a near-term catalyst exists with the potential to drive value growth. While the company says 100 million barrels of oil could exist within its two projects, exploration is grassroots in nature and carries a high degree of risk.

Other companies exploring the Canning Basin have had healthy investor support over the past year, and participants in the Initial Public Offering are receiving a major interest in the company. Directors are the other major shareholders, and signalling confidence in Yeeda Oil's equity potential, managing director David Archibald is forgoing a salary during the company's first year of listing.


COMPANY: Yeeda Oil Limited
ASX CODE: YDO
SHARES ON OFFER: 48 million
LISTINGPRICE: 20c
MARKET CAPITALISATION: $12m
LISTING DATE: September 7


http://www.theaustralian.com.au/business/wealth/yeeda-oil-hoping-to-cap-basins-potential/story-e6frgac6-1226459279658