The gas reserves are one key aspect. Another key unknown to consider is the cost to get the gas out of the ground.
Where will this project sit on the gas cost production curve?
In the Cooper Basin, where there is existing gas infrastructure, it has been suggested the production cost of shale gas will be in the order of $7-$8/GJ. The Cooper Basin shale is deeper than Bowland (1200m v 2000-3000m).
The lower the project sits on the gas production cost curve the more valuable the project. Conversely if your at the wrong end of the gas production cost curve you could find yourselves with a lot of gas but that it is not economic to produce in the current market.
AJL Price at posting:
$1.63 Sentiment: Sell Disclosure: Not Held
