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International News Title: Beach Energy to sell shale gas assets to Chevron • Chevron, the largest holder of natural gas resources in Australia, is buying up to 60 per cent of Beach's interest in two blocks • The deal would see Beach receive about US$207 mn of cash and have about US$142 mn of exploration and pilot production funding met by Chevron • Asset sale scheduled to be carried out soon MELBOURNE - Chevron Corporation, the second largest US energy company, has agreed to pay up to US$349million for stakes in two shale prospects being developed by Adelaide-based Beach Energy. Chevron, the largest holder of natural gas resources in Australia, is buying up to 60 per cent of Beach's interest in two blocks. As per the deal, Beach Energy will transfer up to 60 per cent of its interests in the fully owned petroleum exploration licence (PEL) 218 in South Australia and its full 60 per cent stake and authority to prospect (ATP) 855 in Queensland to Chevron. A small Australian explorer Icon Energy holds the remaining stake in the Queensland block. ATP 855 is located in the Cooper-Eromanga Basin on the eastern side of the Queensland and South Australian border. PEL218 lies adjacent to ATP 855P on the western side of the border and both permits share part of the Nappamerri Trough. Beach has previously estimated that there could be more than 300 trillion cubic feet of gas beneath land it holds in central Australia. That's roughly equivalent to ten times US gas consumption in 2011, and dwarfs the 40 trillion cubic feet contained in Australia's largest conventional natural gas field--Gorgon--offshore Western Australia. "We have an industry-leading queue of LNG projects under development in Australia and this agreement provides an opportunity to explore a new, prospective basin and potentially add to our natural gas portfolio," Roy Krzywosinski, Chevron's Australian head, said in a statement. It is envisaged that Beach will potentially receive US$349 million over two stages for both permits over several years, the oil and gas producer said. Beach said it would be paid about US$207 million in cash and have about US$142 million of exploration and pilot production funding met by Chevron if the US major exercises all of its option to proceed and emerges with 60 per cent of the permits within the Nappamerri Trough in the Cooper Basin. Chevron has also agreed on an option to lift its holding up to 60 per cent at a later date, depending on exploration results. Beach managing director Reg Nelson said: "This transaction vindicates in many ways the vision that the company has in relation to the potential of unconventional gas in the Cooper Basin. We look forward to working closely with Chevron and Icon Energy in the continued rejuvenation of the Cooper Basin." Shares in Beach Energy were trading 1.5 per cent higher at $1.32 at 10.45 AEST. Completion of the transaction is conditional upon all relevant local government approvals, including Foreign Investment Review Board approval and the farm-in agreement approval. Icon Energy has consented to and waived its pre-emptive rights in relation to each stage of the transaction related to ATP 855. Entry of Chevron is expected to give an added fillip to Australia's emerging shale gas sector. Earlier this month, PetroChina announced a deal with ConocoPhillips to explore for gas in Western Australia, which is estimated to have the fifth-largest reserves of shale gas in the world, according to the US Energy Information Agency. So far, Australia has received commitment of over A$1 billion (US$1.02 billion) investment in the country's vast shale reserves from international and domestic oil exploration groups over the next couple of years. There could be almost 400 trillion cubic feet (tcf) of shale reserves in Australia as well as 20 tcf of tight gas, another unconventional natural gas, according to Geoscience Australia. In last year's Energy White Paper, the Australian government noted the country's shale resources were lower in liquids, including more profitable crude oil, than the US because of different geology and with one notable exception would require "costly new infrastructure to develop". That exception is the Cooper Basin, which straddles the borders of South Australia and Queensland and has produced conventional oil and gas since the 1960s. "We've had thousands of wells in the Cooper," says Barry Goldstein, the South Australian government's executive director of Energy Resources. "We know what the rocks are and we have infrastructure overlying all of these shales for the conventional oil and gas. It's a skip and a jump to connect to processing facilities and pipelines to get it to market." Australian oil and gas company Santos has already started producing shale gas from one well in the Cooper basin and is actively searching for more. According to the EIA, the Cooper Basin could yield 85 tcf of gas or 85 years of domestic supply based on current annual consumption of 1 tcf. "The Cooper Basin is a huge potential resource," says managing director of Beach Energy. "This is ground breaking; this is nation building." Its development is also important for the economy in the state of South Australia, which is searching for other drivers of growth after BHP Billiton ditched plans for a A$20billion expansion of its Olympic Dam mine last year.
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#1. To: A K A Stone (#0)
The One State that can't afford the potable water necessary for fracking....;}
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