It's either going to be one of the most brilliant moves in...

It's either going to be one of the most brilliant moves in recent Australian oil exploration history - or it's not - we are soon to find out.

Things in there favour of Canning success:

* They have been there before, pulled out but now have rushed back with their eyes wide open. Why? By applying modern exploration techniques they were able to understand Perth Basin geology much better then reapplied that back to the Canning and suddenly saw it's huge potential, as never before. Remember they also picked up worldwide targets (Yemen & USA) at the same time so this was no act of desperation.
* They were smart enough to lock up a rig for their exclusive use and a huge exploration area so they can quickly capitalise on any success.
* Development well strike rate in the Perth Basin has been absolutely outstanding with well after well coming in meaning they have a team that truly understand the geology and now they are confident they can transfer that to the Canning.
* Arq is now a producer in another oil basin, albeit on a small one at 50 BOPD but they can build on this and obviously see it as a production hub for the area, you wouldn't bother unless you planned to be in a position utilise it quickly.
* A Northern extension WA domestic gas pipeline is in advance stages of planning. Why? They obviously see the area as highly prospective and they will soon have something to transport back south where gas is desperately in short supply and prices have doubled in the last 12 months.

This reminds me of the situation with BHP a few years ago when the share price foundered around $9 no one could see any value....