There is a shale boom waiting to happen in Australia with companies having lined up huge acreage positions. However, the shale and coalbed methane (CBM) plays in the country face an even bigger Catch 22. There is evidence of huge resources but no major shale production. Without major development requirements, the service companies are reluctant to commit equipment to the Australian shale plays.
And, as mentioned several times during the Australian-American Chamber of Commerce meeting in Houston Jan. 18 and while E&P was traveling across eastern Australia, there are a total of two – count them, two – frac crews in Australia. One is booked up solid by Santos, and the other crew is fought over by the other players.
AWE is testing shales and tight sands in the northern part of the Perth basin at the opposite end of the country from where the frac crews are usually located. The company has to pay for those trucks to drive across Australia to work on its wells. That can make for a very expensive well.
Almost every company that E&P spoke to during an Australian visit the week of Jan. 28 said the exploration and development of the shale plays and tight sandstones would move a lot faster if adequate rigs for drilling horizontally and more frac crews were available. There is something there about putting the cart before the horse when it comes to tapping into those resources.
However, the enthusiasm is quite evident in every company. Right now, the shale industry in Australia is in the “proof-of-concept” stage. The wells drilled so far are tantalizing but a long way from the main course.
Only one horizontal well has been drilled in Australia. All of the rest of the fracing has been done in vertical wells. You can tell that the operators are chomping at the bit to take the plays to the next level, but not everything to make that happen is in place yet.
Another question that E&P was asked frequently was whether or not the US would be a major LNG exporter. The Australian players were not nearly as worried about East Africa. It is an indication of just how much the LNG market is worldwide.
If you have a high-horsepower drilling rig, can do core analysis, or can offer an available frac crew, there is a market awaiting you in Australia – now.
You can find out more about the status of the Australian shale plays and CBM in the April issue of E&P in the unconventional report. And join Hart Energy for its first DUG Australia Conference and Exhibition in Brisbane, Australia, Aug. 27 to 29.
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