# Natural gas



## Smurf1976 (26 August 2006)

http://www.abc.net.au/news/newsitems/200608/s1724849.htm

At the risk of saying "I told you so", what I have said for some time is now happening. Australian domestic natural gas prices are on their way to world parity pricing, at a level well above present prices, whether anyone likes it or not.

In short, natural gas is going exactly the same way that oil did, albeit with the 30 - 40 year time lag that has characterised the oil versus gas industries for over a century.

As an investor there is obvious potential for profit or loss from this.

But for consumers and the country as a whole, it alarms me (to say the least) that state governments are aggressively pushing gas just as the sun is coming up to end the cheap gas party.

 A new gas-fired power station in Queensland opened very recently. Two are about to be built in NSW. Victoria has a nice new gas-fired plant and they've built little else for the past decade. SA's power generation is dominated by gas, as is the NT. It's become a major fuel source in WA and even Tasmania has since late 2002 had an operating gas-fired power station.  

How will this end? Exactly the same way as the mad rush in favour of oil for power generation in the 1960's and 70's. A financial and strategic millstone that will be around for decades.  

Time for a sensible energy policy for Australia. One that doesn't involve relying on increasingly expensive oil and gas.   

While you and I may be able to pay an extra $1000 or so for power, what about the poor? Shiver in the dark?


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## nizar (26 August 2006)

Smurf1976 said:
			
		

> As an investor there is obvious potential for profit or loss from this.




how exactly?

I know Santos gets alot of its earnings from gas... (as opposed to oil)


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## Smurf1976 (26 August 2006)

nizar said:
			
		

> how exactly?
> 
> I know Santos gets alot of its earnings from gas... (as opposed to oil)



Profit. Direct exposure to any company producing natural gas for the WA domestic market or, ultimately, the Australian domestic market in general. PROVIDED THAT they don't have long term contracts in place for the sale of that gas at a set price. (Though if they have uncommitted reserves then they could sell these at a higher price in due course).

Longer term. Companies competing against natural gas as an energy source in the same market. For example, coal in WA and in the longer term any non-gas source of electricity practically anywhere in Australia (though I would keep clear of Queensland due to over capacity, long term contracts etc). This is a long term investment possibility however as it won't profit in the short term due to gas supply contracts being in place.

Loss. Any company using lots of gas where this forms a substantial part of total costs. Alumina industry comes immediately to mind.

I'm being very general here. The basic point being that Australian gas won't be sold domestically at a discount to the international price for much longer. And that international price has been rising and IMO will trend up over the long term. The existance of fixed price contracts can (and does) preclude most profit / loss opportunities in the short term outside of WA. A bit like seeing the potential of the internet in 1990 - _someone_ Ã­s going to make $$$ and others are going to lose _eventually_.


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## TjamesX (28 August 2006)

Smurf1976 said:
			
		

> http://www.abc.net.au/news/newsitems/200608/s1724849.htm
> 
> At the risk of saying "I told you so", what I have said for some time is now happening. Australian domestic natural gas prices are on their way to world parity pricing, at a level well above present prices, whether anyone likes it or not.
> 
> ...




Smurf I am interested in what you say. After spending the last year or so in the energy game I have learnt a few things about gas and electricity.

The guys I work for have a view that on the East Coast there is a large surplus of available gas for the next 10-15 years even considering a large increase in gas fired baseload generation. I do agree however that gas fired baseload generation does deplete gas reserves at a much larger rate than otherwise.

In this environment we expect east coast prices to rise only modestly. If they rise too far - generation projects will not get up.

Regarding new electricity generation - there seems to be a large policy move to go for gas because Australia has large reserves. The only other real option for baseload electricity is coal fired. But this seems to present a lot of political issues regarding greenhouse emissions and companies maybe baulking because of a potential carbon tax in the future. 

My view is that for cheapest electricity we would be best served with coal fired - but this is not popular. Gas fired is the best for peaking generation as the cost of adding capacity is much cheaper and it will not deplete reserves significantly. But it is most likely some gas fired baseload generation will materialse because politically its easier and companies want to monetise dormant east coast gas.

The west coast is an interesting situation that because they have so much gas, the owners are shifting it overseas to LNG. Therefore they are in the situation that they will have to compete with LNG for domestic use - and given their very high use of gas this will be a sticky situation when new local contracts come up for renewal (price rises). However I think this situation is very different to the east coast situation.

Smurf - what would be your suggestions regarding new baseload electricity for the east coast, given that coal is very unpopular?

Cheers,
TJ


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## auroraoz (29 August 2006)

I agree gas prices are unsustainably low. Ie, it will find new markets and uses (Transport, cogeneration, bottled gas, export to NZ, CNG,LNG, methanol,synthetic diesel,etc. Such projects are all on the private drawing boards. This means more used, prices rise, and margins for producers rise exponentially. Coal seam Methane companies are on tight margins, as these improve profitability will be leveraged strongly. MEL, AOE, MPO,ESG but a few.  The big boys, STO,ORG,BHP,AGL etc are all into it too (but without such a potent leveraging)and likely to gobble up a few juniors along the way.
MEL and AOE looking for major news and developments over next quarter.
.
AOZ


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## StockyBailx (8 October 2006)

I beg to differ with sum of your apinions Smurf. Since the price of oil has risen Gas has came into a world of its own. Dispite the Americian way of life I think Gas has became a very important Commoditie here in Australia and the rest of the world. For me Gas looks to be a big player in the industry of fuels and resourses as buisnesses start to reshape and include the cheaper alternitive. Take ethonal for example, evryone wants sum.

Just Recently I have put three well Gased up stocks into my portfolio.
_*QGC- *Queensland Gas, *SGL- *Sydney Gas, *ESG- *Eastern Star Gas. _All three of these are well triggered, and look to break all previous boundry's. I dought they will look back for a long time.

Personaly I'm smokin with excitment, because gas has just came into the big pictiure. I have high regards and influence for _GAS._

*YERRHRRR GAS ME UP BABY! :bong: :  *


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## Halba (10 October 2006)

StockyBailx said:
			
		

> I beg to differ with sum of your apinions Smurf. Since the price of oil has risen Gas has came into a world of its own. Dispite the Americian way of life I think Gas has became a very important Commoditie here in Australia and the rest of the world. For me Gas looks to be a big player in the industry of fuels and resourses as buisnesses start to reshape and include the cheaper alternitive. Take ethonal for example, evryone wants sum.
> 
> Just Recently I have put three well Gased up stocks into my portfolio.
> _*QGC- *Queensland Gas, *SGL- *Sydney Gas, *ESG- *Eastern Star Gas. _All three of these are well triggered, and look to break all previous boundry's. I dought they will look back for a long time.
> ...




work on ure spelling. geez!


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## CanOz (25 April 2013)

Natural Gas NG is an interesting contract...check these moves...


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## MARKETWINNER (1 June 2013)

EIA expects the regular gasoline price will average $3.53 per gallon over the summer.The annual average regular gasoline retail price is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon in 2013 and to $3.39 per gallon in 2014. 

EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units (MMBtu) in 2012, will average $3.80 per MMBtu in 2013 and $4.00 per MMBtu in 2014.

However these projections can change at any time due to new developments. Energy price forecasts are highly uncertain

My ideas are not a recommendation to either buy or sell any security,commodity or currency. Please do your own research prior to making any investment decisions


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## CanOz (7 June 2013)

The Energy sector is in for some fun over the next decade. NG and CL have already "decoupled" and we should them continue to stay this way, according to Bloomberg's David Wilson:



> By David Wilson
> June 6 (Bloomberg) -- Cars, trucks, trains and ships will
> increasingly run on natural gas after the fuel’s price broke a
> traditional link with crude oil, according to Edward L. Morse,
> ...


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## kittycriston (20 June 2013)

MCX Natural Gas jun expiry future last closed at 233.7 with gains of 5 rupee+. In intraday MCX Natural Gas future made high near 234 while low was near 229. Total 5 rupee range and continues strong rally. Here buy near support 228 with stoploss and expect 238+ level as target on upside.


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## drillinto (4 August 2013)

Commodities (July 2013)

On the commodities front, everything but the natural gas ETF (UNG) was up in July.  
Oil (USO) was up the most at +9.30%, but gold (GLD) was not far behind with a gain of 7.43%.

http://www.bespokeinvest.com/thinkbig/2013/7/31/july-2013-stock-market-performance.html
***


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## drillinto (5 August 2013)

USA: Natural Gas Monthly

http://www.eia.gov/naturalgas/monthly/


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## drillinto (7 August 2013)

August 5, 2013 

>>>>> Oil to Natural Gas Ratio Back Above 30 <<<<<

http://www.bespokeinvest.com/thinkbig/2013/8/5/oil-to-natural-gas-ratio-back-above-30.html


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## CanOz (27 February 2014)

Traders on another forum have been raving about the this volatility!


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## Smurf1976 (31 May 2015)

Here we go....

http://www.news.com.au/finance/busi...es-gas-shortfall/story-e6frfkur-1227376735830



> AUSTRALIA'S east coast is facing a potential gas shortfall of 155 petajoules of gas by 2019




To put that into perspective, 155PJ is about the same as the entire consumption of NSW. Or to put it another way, it's about the same size as the residential market in all states combined or the entire consumption (all uses) of SA, NT and Tas combined. So it's a significant amount of gas.


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## peter2 (28 February 2018)

Current Natural Gas trade: 
Every now and then you find your self in a trade that starts well then stalls. This NG trade has been interesting as it been mostly in profit and looking likely to be stopped out twice.

Looking at the daily chart, we knew that any move up would likely be choppy as it's a corrective move (after the impulsive move down). Generally I avoid getting into corrective moves unless I think it's almost over. However I'm in this trade and have to manage it as well as I can.

The 4H chart shows the price volatility.

Price has traded at T1, but I want more (at least T1.5 at 2.75). I've raised the stop to 2.62 but raising it again might be tricky with the current volatility. With these types of trades, we have to grin and bear it whatever happens.




_Note_: Try to trade the anticipated impulsive swing rather than the corrective move. This way your trade will quickly fail or start well.


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## peter2 (2 March 2018)

Nat gas trade closed when price spiked higher after the weekly nat gas report. I placed the sell order itm before the report hoping for this exit. Price could have spiked down and taken me out also. Price has been volatile (like most market atm) and not going up as fast as I like.  Result +1R.


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## peter2 (7 March 2018)

Just a note to mention that I've re-entered the NG market. 
Bought at 2.720, iSL 2.670, TR = $500USD. 

I was drawn to the re-entry after seeing the pull-back produce another higher low. Price is grinding  higher and my original target is still in play. As the trade has started well, I've raised the exit stop a little. I've placed sell limit orders just below 2.80.


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## peter2 (9 March 2018)

Nat gas trade #2 has been closed. 
Price got within 0.006 ($60) of my limit sell order (2.799), so I shoved the exit stop closer. Price fell as the US session started and took me out at 2.765. Result + 0.9R.
The two NG trades earned ~1.2% over two weeks. 

Why monitor this trade closer than normal. 
(i) price was very close to my limit sell order which was right under a round number (2.80). 
(ii) Nat gas storage report out in a few hours. This report can move the price quickly. Don't want to be caught out. This report is a weekly scheduled event so traders can be ready. The crude oil inventory report is also released weekly, one day earlier than this one. 

The initial SL was kept wide due to the recent volatility.


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## noirua (26 September 2021)

UK Gas price crisis -
1. *On 1 Oct the energy price cap - that over half of all homes are on - will jump 12% to £1,277/yr (on typical use)*

The price cap changes each October and April. Yet the assessment period that dictates it is far earlier. The new 1 Oct cap is based on average wholesale prices for the six months until the end of July. Yet... the wholesale price has exploded since then. - Cheapest fixes are 60% costlier than a year ago.


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## Smurf1976 (27 September 2021)

noirua said:


> UK Gas price crisis



It goes beyond price alone too.

Multiple energy retail companies in the UK have already gone bust financially and more are expected to do so in the near future. Some forecasts have suggested that of about 70 companies, only 10 or so will likely survive the coming months - they'll be the big ones mostly.

It's also causing some shutdowns in industry and so on plus in at least one case government intervention to avoid that happening.


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## qldfrog (27 September 2021)

Smurf1976 said:


> It goes beyond price alone too.
> 
> Multiple energy retail companies in the UK have already gone bust financially and more are expected to do so in the near future. Some forecasts have suggested that of about 70 companies, only 10 or so will likely survive the coming months - they'll be the big ones mostly.
> 
> It's also causing some shutdowns in industry and so on plus in at least one case government intervention to avoid that happening.



So Putin gas pipeline getting all the more critical to Europe beside their green brainwashing.Putin is now in a very real "who's your daddy?"  position of strength.
While i rejoice at the lessons in life and karma bitch, you have to pity the European citizens.
As for Australia, what happened to these headlines a few years ago stating we would become either the first or second world gas exporter?


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## Knobby22 (27 September 2021)

qldfrog said:


> So Putin gas pipeline getting all the more critical to Europe beside their green brainwashing.Putin is now in a very real "who's your daddy?"  position of strength.
> While i rejoice at the lessons in life and karma bitch, you have to pity the European citizens.
> As for Australia, what happened to these headlines a few years ago stating we would become either the first or second world gas exporter?



We are equal 4th or 5th. 
Shipping vs pipelines.

Putin has managed to make Germany reliant on him due to Merkel shutting down nuclear plants. Very dumb.


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## qldfrog (27 September 2021)

Knobby22 said:


> We are equal 4th or 5th.
> Shipping vs pipelines.
> 
> Putin has managed to make Germany reliant on him due to Merkel shutting down nuclear plants. Very dumb.



And closing coal too.once the woke view of Merkel diseappears she will be seen as one of the worst leader in Germany for a while.following the narrative and destroying the last European economic powerhouse.


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## divs4ever (5 October 2021)

LNG sellers seek credit letters as gas price spike stretches credit limits​
https://au.investing.com/news/commo...s-price-spike-stretches-credit-limits-2437912

sellers getting nervous ... interesting


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## Smurf1976 (5 October 2021)

divs4ever said:


> sellers getting nervous ... interesting



At the retail (to the public) level quite a few companies in the UK have already failed financially.

At the wholesale level well there's definite concern that all of a sudden people who are used to dealing with $20 million now have 1 in front of that.

A big problem there is that some of those in the middle may well turn out to be hedged on one side only. That is, they're selling natural gas under contract to whoever, or are themselves using it to generate electricity which they sell under contract, but they didn't hedge their gas purchases. Anyone in that situation is potentially making huge losses on every ship load of LNG that turns up - buy at $120 million in order to sell it at $20 million. You can't do that for too long before you go broke.

That's speculation on my part but it's definitely possible that someone with contracts to supply gas failed to hedge the purchase of it and is now a financial dead man walking in the same way as the retailers who are locked into a sell price but didn't hedge their buy price have blown up financially.

Needless to say, those on the consumption side won't be at all interested in renegotiating contracts at this point in time.


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## divs4ever (5 October 2021)

yes your speculation is well reasoned , 
but despite the customers freed-up  by the failing minnows  will the big players get those customers  , they MIGHT opt for better home insulation  , or other strategies to use heat more efficiently  ( smaller rooms  , more layers of clothing etc. etc . )

 there is a tiny chance gas consumption will decrease  at least in the mid-term


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## Smurf1976 (14 November 2021)

The price situation does look to be coming through into the Australian market now. Perhaps not with contract pricing but certainly with the spot price it's becoming pretty visible.

Until ~2 weeks ago prices were sitting around the $8 / GJ mark but have moved up quite sharply since then. Current spot prices:

Melbourne = $15.89
Sydney = $13.05
Brisbane = $12.80
Adelaide = $12.00

So price does seem to be moving up significantly at the moment. With the international LNG price being high, it's profitable to buy up gas on the domestic market and run it through the LNG plants in Queensland so that's what's happening. Gas storage inventory is being drawn down in order to keep the LNG plants going flat out since there's $ to be made by doing so.

There's a lot of politics surrounding gas in Australia - I'll keep out of that here and I'm just commenting on what's actually happening physically and with price on the basis that it may have financial relevance to companies operating in this industry.

Data is current for today. Source = Australian Energy Market Operator (AEMO).


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## sptrawler (15 November 2021)

Smurf1976 said:


> The price situation does look to be coming through into the Australian market now. Perhaps not with contract pricing but certainly with the spot price it's becoming pretty visible.
> 
> Until ~2 weeks ago prices were sitting around the $8 / GJ mark but have moved up quite sharply since then. Current spot prices:
> 
> ...



When you add that, to the increase in fuel costs and the increase in shipping costs, how long before we see some interesting inflation figures?


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## Smurf1976 (24 December 2021)

The gas price shock in the UK and Europe, and anywhere else exposed to LNG pricing, continues:




Chart image from this article: https://www.bbc.com/news/business-59760331

It hasn't yet hit the Australian domestic market to major extent but if the situation continues then it's only a matter of time. Not much gas is being put into storage since last winter, it's more profitable to sell it overseas as LNG, but at some point that has to change in order to physically meet demand.


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## frugal.rock (24 December 2021)

A Flotilla of U.S. LNG Cargoes Is Headed to Fuel-Starved Europe
By Sergio Chapa
23 December 2021, 04:53 GMT+11
Bloomberg


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## qldfrog (29 December 2021)

https://finance.yahoo.com/news/cargo-ships-divert-gas-china-131518083.html


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## Smurf1976 (12 May 2022)

Regarding natural gas spot market prices in Australia, I just thought I'd draw attention to the huge spike that's occurring.

2020 prices were around $5 per GJ (gigajoule).

2021 mostly in the $6 - $8 range.

January 2022 around $10.

2 May 2020 about $15 then came the rocket.

3 May reached $16.90

4 May reached $19.10

5 May = $23.64

6 May = $30.00

7 May = $30.40

8 May = $29.65

9 May = $33.97

10 May = $38.42

11 May = $40.00

And the current forecast for later today, 12 May, is $55.00

Those prices are for Victoria and the data source, for historic prices and the forecast, is AEMO (the Australian Energy Market Operator) so that's as official as it gets.

Other eastern states are much the same although the spot market is far less active than in Victoria hence that being the benchmark.

Given that a large portion of gas is sold under contracts the spot price has only modest relevance in the short term in terms of company expenses and revenues but still, it's a very rapid runup in price going on there and we're now at the point where it's becoming cheaper for those who can switch fuels, eg some gas-fired power stations have the ability to use diesel, to do so. Indeed in SA there's already been some increased running of diesel for purely economic reasons, it's becoming cheaper than gas and that's despite the diesel price run up.

Posting it just for info. No comment on who might profit since I don't know all the hedging arrangements and so on but now certainly wouldn't be a good time to be an unhedged buyer of gas. The Australian domestic market is now experiencing a price shock similar to that seen in various other countries over the past 12 months.


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## Value Collector (12 May 2022)

There is a huge new gas field that may soon be developed in the NT, It sits right in the middle of Apa’s east coast grid and their NT system.

The huge volumes that could come from this field could completely offset the depletion of the southern fields and help australia transition off coal by backing up renewables, and help increase our exports.


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## SirRumpole (20 September 2022)

Origin Energy pulls out of fracking in the Beetaloo basin.

There are some big implications for the future of gas in this country.

I hope they have alternative plans, like hydrogen.









						Origin quitting fracking project an 'indicator' of gas industry's future, analyst says
					

Origin Energy's decision to back out of plans to frack for gas in the Northern Territory's Beetaloo Basin could be an early indicator of "fossil fuels falling away", according to an energy analyst.




					www.abc.net.au


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## qldfrog (20 September 2022)

SirRumpole said:


> Origin Energy pulls out of fracking in the Beetaloo basin.
> 
> There are some big implications for the future of gas in this country.
> 
> ...



Alternative what😂?
We are such deep **** but you can not force a Reset if all is good with current situation..so in the abyss we are led


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## SirRumpole (20 September 2022)

qldfrog said:


> Alternative what😂?
> We are such deep **** but you can not force a Reset if all is good with current situation..so in the abyss we are led




Indeed so. Lack of planning once again, although it's not a bad as shutting down current productive assets and replacing them with nothing..


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## sptrawler (20 September 2022)

SirRumpole said:


> Indeed so. Lack of planning once again, although it's not a bad as shutting down current productive assets and replacing them with nothing..



The fact that there wont be enough gas to run alternative generating assets, they are effectively shutting down productive assets and replacing them with nothing. As the coal generators will fail, due to no new coal, age and reluctance to spend money on them.
Sleep walking into a disaster, but maybe that is good, as it will certainly wake people up.
It will be great when people are sitting in the dark, looking at a poster of the back of Sarah Hanson what's her names dress.



Hope that doesn't come back to bite her in the coal.


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## SirRumpole (21 September 2022)

Interesting update on the Beetaloo.









						Fracking giant backed by American billionaires buys up Origin's Beetaloo stakes
					

Tamboran Resources has overnight become the biggest player in the Northern Territory's Beetaloo Basin.




					www.abc.net.au
				




A company facing fines for refusing to front a senate committee investigating gas subsidies has overnight become the biggest player in the Northern Territory's Beetaloo Basin.

Key points:​
Tamboran Resources secured $195 million during its capital raise to buy Origin's permits
The project is now heavily backed by American billionaire Bryan Sheffield
Tamboran's CEO says he "couldn't disagree more" that Origin's sale was a red flag

After racing to raise millions of dollars in investments, the company now has power to explore for gas buried deep in the basin, across almost 2 million acres.

Origin Energy announced on Monday it would be abandoning plans to frack for gas amid what it described as "uncertain and expensive efforts to drive the projects into the production phase".

Tamboran locked in more than $195 million from investors in a matter of days, of which more than half came from "strategic money out of the US", according to the company's chief executive Joel Riddle.


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## qldfrog (22 September 2022)

qldfrog said:


> And closing coal too.once the woke view of Merkel diseappears she will be seen as one of the worst leader in Germany for a while.following the narrative and destroying the last European economic powerhouse.



Nice how you can be seen right after a few months..
But here we have decided to help Putin:








						'A huge victory': Traditional owners win court challenge against $4.7b Santos gas project
					

A federal court judge has upheld a challenge brought by Munupi clan elders who said they were not properly consulted before the project was approved.




					www.abc.net.au


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## orr (23 September 2022)

SirRumpole said:


> Origin Energy pulls out of fracking in the Beetaloo basin.
> 
> There are some big implications for the future of gas in this country.
> 
> ...



Twiggy's has brought in Andrew Vesey to FFI and Origin position after giving the two fingers to Dingus Taylor on early shut-downs is nothing like that of AGL in 2018; so I'd say there's a few things moving in the right direction past the planning stage. As opposed to Beetaloo which will be a _long_ time in the planning stage.

It's been the historical experience that wars/military ops  end, sometimes abruptly. And if that; what for the european gas market then? and the global effect. There'd be some ahhh Big Impications.


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## sptrawler (23 September 2022)

SirRumpole said:


> Interesting update on the Beetaloo.
> 
> 
> 
> ...



Maybe the yanks are aware of the realities, more than the woke sector and Origin just can't be bothered with all the flack that they would cop between now and when it has to be developed?
Easier just to sell it to a company that is out of reach of the Australian media, than to hold it and take the constant bad press for doing so, no point in constantly fighting the renewable sector until it becomes obvious whether 100% renewables will work, or not.


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## sptrawler (23 September 2022)

qldfrog said:


> Nice how you can be seen right after a few months..
> But here we have decided to help Putin:
> 
> 
> ...



Gas and coal are done in Australia, until the electrical sector over east falls in a heap IMO.


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