Falcon Oil & Gas, an explorer planning to drill shale prospects in Australia with US giant Hess, said it is "open to the idea" of forming a second partnership to develop about 10% of its acreage in the country, according to a report.
Falcon is seeking a shale specialist to fund exploration in two areas spanning about 700,000 acres of the Beetaloo basin, chief executive Robert Macaulay told Bloomberg.
The company owns permits covering 7 million acres in the basin in the Northern Territory, according to its website.
The oil and gas explorer, which holds almost 15 million acres in three projects in Australia, Hungary and South Africa, agreed to a venture with New York-based Hess last year to develop three blocks in Beetaloo.
Hess, ConocoPhillips, BG Group and Mitsubishi have agreed to fund shale gas exploration campaigns through ventures in Australia.
Before the Hess transaction, “we had every major in the world active in shale, all the serious players, come by to look at our data,” Macaulay told Bloomberg. “The opportunities in Australia are tremendous. It’s going to become more attractive.”
Hess plans to make a decision by the year-end on whether to fund a five-well drilling program that is expected to start next year, Macaulay said.
Any partnership accord to develop Falcon’s additional holdings in the Beetaloo region, about 600 kilometres (373 miles) south of Darwin, would probably be reached after Hess commits to the drilling plans, he said.
The five wells may cost about $50 million, Macaulay estimated, saying those expenses have yet to be determined. Hess has paid the company $20 million and agreed to fund $40 million of initial work that started last year, Falcon said in July.
Falcon advanced 5.3% to C$0.10 in Toronto trading on Tuesday. The shares have slumped about 39% in the past 12 months.
Santos, Beach Energy, Senex Energy and AWE are among explorers with shale-gas projects in Australia. Santos is planning to drill four unconventional wells in the second half in the Cooper basin, the country’s main source of onshore gas.
With almost 400 trillion cubic feet of estimated shale gas that may be recoverable, Australia has “major” potential in four regions, the US Energy Information Administration said in April.
The areas consist of the Cooper basin straddling the South Australia and Queensland border, the Maryborough basin in Queensland, and the Perth and Canning basins in Western Australia, according to the EIA.
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