Position remote, potential enormous
PUBLISHED: 26 May 2012 00:04:19 | UPDATED: 26 May 2012
Coal seam gas explorer Blue Energy, with its new exploration director John Ellice-Flint, is setting its sights on a shale gas and oil area that is also on the radar of the majors.
Chief executive John Phillips is talking up “huge potential” in the four large exploration blocks in two remote areas of Queensland that Blue Energy is set to be awarded after outbidding rivals Santos, Canada’s PetroFrontier and others.
The move to secure the 7.7?million acres of licences in the sparsely explored Georgina and Carpentaria Basins predates the arrival of Ellice-Flint.
But the former Santos boss is enthusiastic about the position, which he expects will attract interest from international energy companies seeking a local entry into the unconventional space. BHP?Billiton, BP, ExxonMobil, Shell, Total and Inpex are among the companies looking for a foothold in?shale in Australia, after the early lead of Hess, BG Group and ConocoPhillips.
Blue’s hiring of the former Santos boss has not been without its critics given his generous remuneration, including shares and options worth more than $30?million, on top of a $200,000 a year salary.
But Ellice-Flint is regarded as one of the visionaries of Queensland’s coal seam gas-based liquefied natural gas industry, where more than $50 billion is being invested, and has a good track record in spotting nascent commercial opportunities.
Although its focus has been on coal seam gas exploration in Queensland, Blue has been quietly positioning itself in shale, although its permits with Beach Energy in the little-known Maryborough Basin have yet to be awarded.
The US Energy Information Administration has put potential recoverable resources in the basin at a huge 23 trillion cubic feet.
Phillips says the new permits will add to the pipeline of opportunities for Blue, whose share register includes giant LNG buyer Korea Gas and hedge fund Mathews Capital.
Strangled by the red tape in Queensland’s coal seam gas sector that has slowed approvals, Blue has struggled to build its reserves.
One of Ellice-Flint’s tasks is to shepherd Blue towards its goal of 3000 petajoules of proven, probable and possible reserves by the end of 2014. That’s up from 75 PJ now.
In addition to technical oversight of exploration, he will be engaging with the Queensland government and regulators to try to overcome the bureaucratic obstacles.
A recent raising has substantially boosted Blue Energy’s cash reserves to $25.4?million and has provided funds to cover the 2012 appraisal work.
http://www.afr.com/p/business/companies/position_remote_potential_enormous_N7rFtPrzmYMV9q9GoBOgFN
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