All,I copied this from CAMDEN BOB in the CTP thread.If your...

All,

I copied this from CAMDEN BOB in the CTP thread.

If your holding RFE then there are some very interesting points of view carried by Beach petroleum below.

Specifically the comments around shale gas in the USA and its potential.


UNCONVENTIONAL gas is emerging as the next revolution in the
Australian petroleum industry, with the potential to rival even the
coal seam gas sector in its impact.
These are not the words of an over-excited junior
explorer trying to drum up interest in a capital raising.
They belong to Reg Nelson, the revered chief of Beach
Petroleum and a man with a track record of picking the
next big thing.
Beach shareholders can expect to hear plenty about
unconventional gas when Nelson addresses the
company’s annual general meeting in Adelaide today.
He has written at length about the subject in the
company’s recent reports and investor presentations.
Much of his commentary has gone unreported, but a
flurry of deals by Beach in recent months is making it
increasingly difficult to ignore Nelson’s predictions
about the big future he sees for unconventional gas.
In the 2009 annual report released last month, Nelson wrote unconventional
gas had the potential for “a very large gas resource in the order of many tens
of trillions of cubic feet that could begin to approach the CSG reserves of
Queensland.”
Nelson’s bullish view is based on recent developments in unconventional gas
in the US and the upbeat assessments of its potential in other overseas
markets.
In the US, unconventional gas has transformed the petroleum business in a
similar fashion to coal bed methane in Australia. (CSG is included in most
definitions of unconventional gas, although in the US it more typically means
shale gas and low permeability reservoirs).
According to the American Gas Association, shale gas in the US boosted the
country’s total gas resources from 1300tcf in 2006 to more than 1800tcf in
2008.
These figures were presented last month to the World Gas Conference in
Buenos Aires, where unconventional gas was a hot topic, according to Dr
Graeme Bethune of energy consultancy, EnergyQuest.
"Many of the speakers, including leaders from BP, Repsol and other major
players in world energy, emphasised the opportunities in unconventional gas,
particularly in light of recent developments in the US and Australia.
"The general conclusion was the world has more gas than anyone could have
expected due to new unconventional sources."
The parallels between CSG in Australia and shale gas in the US are not
coincidental; the energy revolution in both sectors was due to breakthroughs
in well completion methods and technologies.
The big players in world energy are now scouring the world for unconventional
gas plays to rival the Barnett Shale in the US.
Nelson believes the Cooper Basin is a big shale gas opportunity and has
moved quickly to secure a leading position.
The company already has contingent resources of unconventional gas of 962
petajoules (almost 1tcf or 179 million barrels of oil equivalent) in the Cooper
Basin.
By way of comparison, that’s almost as much as the 3P (proven, probable and
possible) gas reserves in the Tipton West joint venture that Beach sold to
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1 of 3 26/11/2009 3:47 PM
Arrow earlier this year, and more than double Beach’s contingent resources of
conventional gas in the Cooper Basin.
But this is just a small part of the story, based on work done by Santos for the
Cooper Basin Joint Venture on the shale, coal and/or low permeability
reservoirs of Moomba and Big Lake fields. (Santos last year booked 3.2tcf or
590MMboe of contingent resources of unconventional gas in the Cooper Basin).
Beach is also pursuing its own unconventional gas play in the Nappamerri
Trough, the thickest and deepest section of the Cooper Basin and one of two
big source kitchens in Australia’s most prolific onshore petroleum province.
The Nappamerri Trough is covered by two large permits – PEL 218 in South
Australia and ATP 855P in Queensland, with a combined area of more than
3000 square kilometres in the centre of the Cooper Basin.
PEL 218 was granted to Adelaide Energy in 2007 after its potential for
unconventional gas caught the eye of non-executive director Rod
Hollingsworth, who led Delhi Petroleum’s exploration activities in the Cooper
Basin.
In July, Adelaide and Beach finalised a farm-in deal under which Beach will
acquire a 90% interest in the Permian and post-Permian strata of PEL 218 by
paying $5.14 million and carrying Adelaide through the next $25 million of
exploration spending.
Beach also subscribed to a $1 million placement of about 7% of Adelaide’s
expanded issued capital at $0.12 cents a share.
Last month, Beach tied up another farm-in with Icon Energy to secure a
leading position over the Queensland section of the Nappamerri Trough.
Beach will earn up to 40% of ATP 855P from Icon and has also taken an equity
stake in Icon worth $3.5 million.
Beach has also been busy forming alliances with companies that can help
commercialise unconventional gas in the Cooper Basin and elsewhere.
One of these new partners is Sundance Energy. The Adelaide-based junior
listed on the Australian Securities Exchange in 2005 with a mixture of assets
in Australia and the US.
The company sold most of its Australian assets, except for an interest in PEL
100, to focus on unconventional oil and gas in the US.
Sundance specialises in identifying unconventional prospects where horizontal
drilling and advanced fracture stimulation can allow economic development.
It typically brings in a bigger partner to partially fund and operate the
development, and then moves on to the next opportunity.
Beach and Sundance last month announced an alliance to jointly identify,
evaluate and potentially acquire unconventional oil and gas assets, principally
in Australasia, focusing on shale assets similar to those developed by
Sundance in US.
The alliance was cemented with a $2.4 million placement to Beach of 17.5
million Sundance shares at $0.135 per share. This represents about 9% of
Sundance’s expanded capital.
Sundance Energy chairman Mike Hannell said the company’s US-based
management team had vast experience in the drilling techniques used in
unconventional oil and gas production.
“In the US, we’re typically drilling vertically to depths of more than 3000
metres, then horizontally for another 1.5 to 2 kilometres.
“Our managing director Jayme McCoy and operations manager Paul Frank have
spent their whole careers working in North America. They also have excellent
contacts with the service companies that had developed these techniques for
shale oil and gas.”
He said drilling operators in the US had developed highly successful well
completion techniques, typically involving multiple fracturing programs.
“It’s in the design of the downhole equipment, the choice of fraccing fluids
and the experience with using the right amounts of fluids.
“All these ingredients have come together to unlock oil and gas from shales in
the US in incredible volumes. Unconventional gas now meets a large part of
domestic gas demand in the US.”
Announcing the transaction last month, Nelson said Sundance had a proven
track record of identifying shale opportunities in the US market at an early
stage, developing them and then bringing in larger partners.
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“This is a good fit with Beach’s strategy of partnering with emerging energy
companies with a promising asset base and sound technical expertise.
“Beach brings its own technical expertise and balance sheet strength to the
relationship. The alliance with Sundance will allow us to keep in touch with the
rapid advances in technology occurring in the USA.”
Another piece of the puzzle fell into place last week when Beach signed a
memorandum of understanding with Rentech, a US-based synthetic fuels
company.
The new partners will jointly explore opportunities to transform Beach’s
unconventional gas resources into transport fuels, fertilisers and other
commodities.
The deal is an indication of the massive volumes of gas deep in the Cooper
Basin that Beach believes can be commercially developed.
While it’s still early days, Nelson’s record in picking winners in coal seam
methane and geothermal energy is good reason to believe the revolution in
unconventional gas is heading our way.
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