Oil Shale - an economic alternative?

[So_Cynical]

Time to revive this thread I think. Condog has put some excellent links on the AUT thread. US Oil shale plays have been going gangbusters over the past 6 months

AUT, SSN, SEA, TXN, AZZ spring to mind.

Begs the question...why haven't the Aussie oil shale stocks received any attention? Aust has one of the largest oil shale reserves in the world, when will these reserves get fraced and tested for gas?

 

[UBIQUITOUS]

Begs the question...why haven't the Aussie oil shale stocks received any attention? Aust has one of the largest oil shale reserves in the world, when will these reserves get fraced and tested for gas?

That's a question which I have considered. Horizontal drilling is a relatively new technique which quite a few US majors have been successful at. Maybe we don't have the expertise here.

For example, in the US the Aussie juniors SEA and SSN have farmed out to megabillion dollar companies such as Noble, EOG and Hess. And now Chesapeake are getting in on the act by paying SSN $75m for some acreage, and CHK are well known as serial drillers.

Another factor is the domestic supply deficit in the US. Do we really have the same deficit here?

As an investor, I would much rather invest in an Australian stock with ops focused in the US (with the currency risks), due to the vast sums of capital that is willing to be thrown at 'what is hot'. SSN is dual listed and SEA is available through pink sheets. In Aus its a case of too many stocks and not enough investment capital to chase them - hence undervalued companies which can take much longer to be priced correctly.

 

[Smurf1976]

Another factor is the domestic supply deficit in the US. Do we really have the same deficit here?

Australia is post-peak in terms of oil production and relies increasingly heavily on imports to meet domestic demand. We were never a significant oil net exporter, but did achieve production rates close to consumption for some years.

The well known Bass Strait field peaked in 1985 and is all but gone now, with production a fraction of what it once was. Nationally, production peaked around 2000.

Gas on the other hand is a far less depleted resource in Australia and production is still rising. Depending on what estimates you use, somewhere around 85% of it is still in the ground. That said, Cooper Basin (SA) reserves are substantially depleted and production in decline. Bass Strait reserves have also been significantly consumed although production is not presently constrained by the size of remaining reserves.

Most of Australia's gas reserves are in WA, NT and coal seam gas in Qld and NSW. Tasmania is the only state with no local gas production industry, although the Yolla field is half way between Vic and Tas (production is piped to Vic) and it is probable that small amouts of coal seam gas could be recovered. Every other state has at least some gas industry either conventional or coal seam (although gas production in NSW is relatively trivial, most supply to that state coming from SA and Vic).

So in short, it always makes sense to look for and extract oil since there is a market locally and internationally. But in Australia, it only makes sense to develop more gas if you're planning to export it (which needs to be large scale to be economic) or, on a very small scale, supply nearby towns or a mine that otherwise don't have access to gas. Australian domestic gas prices are low by international standards due to the local supply situation and the relatively high cost of liquefaction for export.

 

[burglar]

Australia is post-peak in terms of oil production and relies increasingly heavily on imports to meet domestic demand. ... .

Lifting of Moratorium on Oil Shale Exploitation on Greenvale (ASX:GRV) Projects

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01382640

 

[greggles]

Higher oil prices and increasing demand as economies start to return to normal after COVID-19 is bringing US production of shale oil back into the spotlight.

The Dawn Of A New Era For U.S. Shale | OilPrice.com

With the perfect combination of high oil prices and more conservative capital expenditure, U.S. shale firms are on track to see record profits in 2021

oilprice.com