Wednesday, 4 September 2013

Falcon Oil & Gas positioned for Aussie shale revolution

Broker Ambrian believes a US-style shale revolution is about to hit Australia, where a number of ambitious juniors, including Falcon Oil & Gas (LON:FOG), have carved out significant acreage.
Analysts Stuart Amor and Emily Ashford  point to the "couple of hundred million dollars" that's already been spent exploring the likes of the Cooper, Canning and Beetaloo basins and the "several hundred" more set to be pumped into Oz.
With that investment has come interest from some fairly hefty companies, including Chevron, BG,ConocoPhillips and Mitsubishi.
And no wonder.  The potential size of Australia’s shale gas resources is truly enormous, albeit highly uncertain.
A recent US Energy Information Administration-sponsored report of world shale oil and gas said the risked, technically recoverable resources from just six of Australia’s basins are 437 trillion cubic feet of gas and 17.5bn barrels of oil.
Ambrian's report co-incided with an update from Falcon Energy, which said on Tuesday  it was “very confident” of landing a farm-in partner for its highly prospective acreage in Beetaloo Basin.
In July the group revealed that Hess elected not to pull the trigger on a five-well programme after being refused a month-long extension to its agreement with London and Dublin-listed explorer.
However, Falcon had what it described as "unsolicited interest" from other large companies looking to partner on what is shaping up to be a world-class conventional and unconventional oil and gas play.
Chief executive Philip O'Quigley said he is hopeful of finding a Hess replacement "at the shorter end" of the three to six month timescale it takes to tie up a farm-out.
"We knew from the level of interest we had over the past year, we had a very good chance of getting an alternative farm-out partner," O'Quigley told Proactive Investors.
"This is how I'm spending most of my time now - I'm in the process of talking to large oil and gas companies.
"That is the main focus, the near-term share price catalyst. Most of my time and energy is on that and I'm confident we can secure a good deal."

He added: "We are feeling pretty good about the process. We have a great sense, a great feel."

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