milestones - part 2, page-7

Fair question Gassed.

Shallow = cheap drilling. Whether its an economic return is another thing.

The big difference here, and having CVX around will help a lot, it the difference E&P capital costs.

I'll put up another post later for the 3rd Milestones post looking at Midstream, but for the Upstream part of the business Australia might be almost 2 times the cost of USA. In of itself that would not be a problem if say we got 3 times the EUR per well.

From what I'm reading, drilling vertical shale wells to 3,000m can cost $7-9M down plus another $8-$10M to frac them (this becauseo of remote areas and poor infrastucture).

Possible a Hz could be $20M - again depth and #frac stage dependent. Not an issue if its a 10Bcf EUR (so 8Bcf if 20% CO2) which is $2.50/Mcf before we go to NAV and other costs,

So what would a shallow well cost - $4M?? If it produces EUR 1.5Bcf (so 1.2Bcf sales gas) its over $3.30. 200Mcfpd is not enough I don't think.

See the relationship.


CVX will understand from experience how to manufacture gas from a shale play - they will be relentless about getting costs (that we control) down as the play develops. The more that occurs the better we become (that and a weaker AUD$).


Bystander - the April 2012 AEMO report I have says shale unconventionla gas from Cooper Basin is production $8.30/GJ. Didn't see it change in the Aug update.