Melbourne --23Jun2010/505 am EDT/905 GMT
Two reports and a A$150 million ($132 million) farm-in deal at a
neighboring tenement support New Standard Energy's belief that the onshore
Canning Basin in Western Australia has significant potential for commercial
shale gas production, the Australian oil and gas explorer said late Tuesday.
A wide-ranging review of coal seam, shale and tight gas in Australia by
Resource Investment Strategy Consultants has confirmed the resource and
commercialization potential of the Goldwyer shale exploration play in the
Canning Basin, NSE said.
The report by RISC found there was "huge" potential for Canning Basin
shale gas to be supplied economically to the state's domestic gas market, NSE
quoted RISC as finding. The report was made available to subscribers this
week.
RISC estimated potential gas initially in place of 40-480 trillion cubic
feet over the most prospective parts of the Goldwyer formation, spanning an
area of around 80,000 sq km, NSE said.
NSE holds the oil and gas exploration rights to more than 48,000 sq km of
exploration acreage in the Canning Basin, which overlaps with the prospective
Goldwyer shale gas window.
It said the RISC report confirms the findings of a review it commissioned
Netherland and Sewell and Associates (NSAI) to undertake earlier this year.
That study found that Goldwyer appeared to contain the requisite
geological indicators for shale gas, NSE said.
NSE also noted that Mitsubishi on June 15 had farmed in to Buru Energy's
Canning Basin assets, which are adjacent to its own, through a A$152.4 million
exploration and development program.
"This farm-in provides significant and credible validation from a very
large international company," NSE said.
Mitsubishi can earn up to a 50% interest in Buru's exploration permits
under the deal by funding up to A$62.4 million of conventional exploration and
A$40 million of unconventional exploration, and may also carry up to A$50
million of Buru's development costs for major oil and gas production
infrastructure.
New Standard holds a 10% interest in Buru.
"We are delighted that major, credible, independent groups are assessing
and recognising the hydrocarbon opportunities in the Canning Basin," NSE
managing director Sam Willis said in the statement.
"RISC has undertaken this work completely independently and their views
confirm what we have been stating for some time -- that although [at an] early
stage, the Goldwyer shale has the potential to host a substantial onshore gas
resource.
"We readily acknowledge that it is still too early to put specific
numbers around potential resources in NSE's acreage and that the next step for
us is to drill some wells on our acreage, core the shale and obtain the gas in
place data that is specifically relevant to our area.
"The RISC report does, however, confirm the Goldwyer as a highly
prospective shale gas opportunity with large potential resource numbers that
could potentially be extracted economically."
Two reports and a A$150 million ($132 million) farm-in deal at a
neighboring tenement support New Standard Energy's belief that the onshore
Canning Basin in Western Australia has significant potential for commercial
shale gas production, the Australian oil and gas explorer said late Tuesday.
A wide-ranging review of coal seam, shale and tight gas in Australia by
Resource Investment Strategy Consultants has confirmed the resource and
commercialization potential of the Goldwyer shale exploration play in the
Canning Basin, NSE said.
The report by RISC found there was "huge" potential for Canning Basin
shale gas to be supplied economically to the state's domestic gas market, NSE
quoted RISC as finding. The report was made available to subscribers this
week.
RISC estimated potential gas initially in place of 40-480 trillion cubic
feet over the most prospective parts of the Goldwyer formation, spanning an
area of around 80,000 sq km, NSE said.
NSE holds the oil and gas exploration rights to more than 48,000 sq km of
exploration acreage in the Canning Basin, which overlaps with the prospective
Goldwyer shale gas window.
It said the RISC report confirms the findings of a review it commissioned
Netherland and Sewell and Associates (NSAI) to undertake earlier this year.
That study found that Goldwyer appeared to contain the requisite
geological indicators for shale gas, NSE said.
NSE also noted that Mitsubishi on June 15 had farmed in to Buru Energy's
Canning Basin assets, which are adjacent to its own, through a A$152.4 million
exploration and development program.
"This farm-in provides significant and credible validation from a very
large international company," NSE said.
Mitsubishi can earn up to a 50% interest in Buru's exploration permits
under the deal by funding up to A$62.4 million of conventional exploration and
A$40 million of unconventional exploration, and may also carry up to A$50
million of Buru's development costs for major oil and gas production
infrastructure.
New Standard holds a 10% interest in Buru.
"We are delighted that major, credible, independent groups are assessing
and recognising the hydrocarbon opportunities in the Canning Basin," NSE
managing director Sam Willis said in the statement.
"RISC has undertaken this work completely independently and their views
confirm what we have been stating for some time -- that although [at an] early
stage, the Goldwyer shale has the potential to host a substantial onshore gas
resource.
"We readily acknowledge that it is still too early to put specific
numbers around potential resources in NSE's acreage and that the next step for
us is to drill some wells on our acreage, core the shale and obtain the gas in
place data that is specifically relevant to our area.
"The RISC report does, however, confirm the Goldwyer as a highly
prospective shale gas opportunity with large potential resource numbers that
could potentially be extracted economically."
