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Will The Australian Basins Drive The Next Shale Oil And Gas Boom? – Chevron Corporation (CVX), ConocoPhillips (COP)

Chevron (CVX) Set to Win Lithuanian Shale Gas LicenseThe advances in the technology for hydraulic fracturing has arguably helped a spectacular rise of shale oil and gas production in North America. After this indisputable oil and gas boom, Australia is poised to commercialize its holdings too. Will Australia replicate North America’s success? Will the shale oil and gas production rise in Australia as much as the largest of the kangaroo species, the Red Kangaroo, has been observed jumping?

According to the U.S. Energy Information Administration (EIA), Australia’s regions have significant oil and gas potential. In shale oil, the Canning Basin in Western Australia and the Georgina and Amadeus basins in Queensland and the Northern Territory are seen as having oil potential, while the Cooper Basin is seen as the best shale gas target.

Assuming EIA is correct, the thing is which publicly traded North American companies are going to benefit from this huge opportunity. Let’s be an early mover then, providing the investors valuable information about all the deals that the US-listed energy companies have completed in Australia so far. These deals are scattered here and there and the summary below will definitely help.

Australia Is Getting Hot

The latest news come from Chevron Corporation (NYSE:CVX) that pays as much as $349 million to join Beach Energy in an Australian natural gas exploration campaign. This is Chevron Corporation (NYSE:CVX)’s first shale investment in Australia. Chevron Corporation (NYSE:CVX) will acquire as much as 60% of a permit in South Australia and 36% of a block in Queensland. The blocks cover about 810,000 acres in the Cooper Basin. The Cooper Basin is considered to be one of Australia’s best prospects for commercially producing shale gas given its proximity to the country’s eastern population centers and export infrastructure at the port of Gladstone.

Few days ago, ConocoPhillips (NYSE:COP) and PetroChina Company Limited (ADR) (NYSE:PTR) also teamedup for unconventional natural gas exploration in Australia as PetroChina recognizes the significant resource potential and value of the Australian opportunities. PetroChina will acquire from ConocoPhillips a 20% WI in the Poseidon offshore discovery in the Browse Basin, and a 29% WI in the Goldwyer Shale in the onshore Canning Basin. The Goldwyer Shale runs along the northern edge of Great Sandy Desert and stretches across 45,000 sq km of the onshore basin.

ConocoPhillips earned a 75% WI from New Standard Energy in July 2011 in exchange for $A113.5 million. According to an April 2011 report by EIA, the Goldwyer Shale contained 764 tcf of risked gas in place and 229 tcf of risked recoverable gas, the largest estimate for any basin in Australia.

Heritage Oil added few weeks ago on its stake in PetroFrontier Corporation, a Canadian company that holds both conventional and unconventional petroleum assets in Australia’s Southern Georgina Basin. PetroFrontier has an approximate 85.5% WI in 14.1 million gross acres and it is one of the first companies to undertake exploration in the Southern Georgina Basin in Australia’s Northern Territory. Heritage acquired 1,800,000 common shares of PetroFrontier representing 2.27% of the outstanding Shares. Together with shares already held, Heritage now holds 13,960,467 shares, representing approximately 17.58% of the outstanding Shares of PetroFrontier. Heritage is a Toronto-listed company with producing assets in Nigeria and Russia and exploration assets in Malta, Tanzania, Pakistan and Libya.

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