The oil and gas sector on the Australia Securities Exchange continued a rejuvenating recovery in 2017 with market cap growth of 20% in the 12 months to Nov. 31.
The engines pulling the train of revival, as revealed by Australian Oil & Gas Research, were led by the six billion-dollar cap top tier companies, which grew 20% to reach a combined market cap value of $89billion, and the next tier First Division players—with a market cap greater than $100 million—which expanded by 32%.
The small cap juniors (market caps of $10 million to $100 million) barely treaded water during the same period, with a market cap contraction of -1%, while the penny stock tadpoles (market caps less than $10 million) shrunk by -20%.
The stock star performers of the ASX for the 12-month period to Nov. 30 were Brisbane-based explorers Blue Energy, whose share price spiked 415% and Comet Ridge, whose stock soared 236% during the same period.
Both companies shared a common strategy of shoring up quality gas reserves at attractive prices to supply the famished east coast of Australia.
John Phillips, managing director at Blue Energy, said his company was in a good position to deliver its uncontracted gas from the Bowen Basin to southern gas markets. In June, Blue Energy signed a MOU with APA Group for the construction of a new pipeline to transport Bowen Basin gas to east coast centres.
Phillips said the Basin had 10,000 PJ to 15,000 PJ to deliver to the east coast, subject to state and federal government support and construction of a pipeline.
“The solution to reducing energy and gas prices is to bring more gas to market,” Phillips said.
The Australian Market Operator has calculated potential east coast gas shortages of up to 107 PJ next year. In the Bowen Basin Blue Energy has 3,000 PJ of reserves, enough to supply the domestic market for up to five years.
Tor McCaul, managing director at Comet Ridge, described the east coast gas crisis as a “slow unravelling train wreck in that the train has been coming down the tunnel for years now and we’ve been able to see the light on, but no one’s been listening.”
Comet Ridge, however, maneuvererd into position at its Mahalo Project, which counts Curtis Island LNG export operators Santos and APLNG as JV partners, and where it successfully stimulated three wells this year with “excellent results”.
“Mahalo ticks a lot of boxes in that it’s permeable and it’s shallow, which means it should be cheap to develop. It’s got low water rates, it’s close to infrastructure and it is sales spec gas. And given it’s close to infrastructure, we should be able to move it relatively quickly,” McCaul said.
Further north the company has a strong position in the Galilee Basin, where in the first quarter of 2018 they will drill a well that flowed gas at low rates in 1995, this time expecting better results drilling with modern technology, specifically nitrogen.
The proposed Adani coal mine is only 35 km east of the well and looms as a potential customer for Comet Ridge’s Galilee Basin gas.
“The market has finally worked out that gas molecules are quite difficult to get and valuable. I think Mahalo moving forward will provide a low-cost sub surface solution and I think the scale of the Galilee and the fact that we’ve come together with a farm in and we are planning a well for 1Q. I think all of those things combining to drive the value,” McCaul said.
The oil and gas sector on the Australia Securities Exchange continued a rejuvenating recovery in 2017 with market cap growth of 20% in the 12 months to Nov. 31.
The engines pulling the train of revival, as revealed by Australian Oil & Gas Research, were led by the six billion-dollar cap top tier companies, which grew 20% to reach a combined market cap value of $89billion, and the next tier First Division players—with a market cap greater than $100 million—which expanded by 32%.
The small cap juniors (market caps of $10 million to $100 million) barely treaded water during the same period, with a market cap contraction of -1%, while the penny stock tadpoles (market caps less than $10 million) shrunk by -20%.
The stock star performers of the ASX for the 12-month period to Nov. 30 were Brisbane-based explorers Blue Energy, whose share price spiked 415% and Comet Ridge, whose stock soared 236% during the same period.
Both companies shared a common strategy of shoring up quality gas reserves at attractive prices to supply the famished east coast of Australia.
John Phillips, managing director at Blue Energy, said his company was in a good position to deliver its uncontracted gas from the Bowen Basin to southern gas markets. In June, Blue Energy signed a MOU with APA Group for the construction of a new pipeline to transport Bowen Basin gas to east coast centres.
Phillips said the Basin had 10,000 PJ to 15,000 PJ to deliver to the east coast, subject to state and federal government support and construction of a pipeline.
“The solution to reducing energy and gas prices is to bring more gas to market,” Phillips said.
The Australian Market Operator has calculated potential east coast gas shortages of up to 107 PJ next year. In the Bowen Basin Blue Energy has 3,000 PJ of reserves, enough to supply the domestic market for up to five years.
Tor McCaul, managing director at Comet Ridge, described the east coast gas crisis as a “slow unravelling train wreck in that the train has been coming down the tunnel for years now and we’ve been able to see the light on, but no one’s been listening.”
Comet Ridge, however, maneuvererd into position at its Mahalo Project, which counts Curtis Island LNG export operators Santos and APLNG as JV partners, and where it successfully stimulated three wells this year with “excellent results”.
“Mahalo ticks a lot of boxes in that it’s permeable and it’s shallow, which means it should be cheap to develop. It’s got low water rates, it’s close to infrastructure and it is sales spec gas. And given it’s close to infrastructure, we should be able to move it relatively quickly,” McCaul said.
Further north the company has a strong position in the Galilee Basin, where in the first quarter of 2018 they will drill a well that flowed gas at low rates in 1995, this time expecting better results drilling with modern technology, specifically nitrogen.
The proposed Adani coal mine is only 35 km east of the well and looms as a potential customer for Comet Ridge’s Galilee Basin gas.
“The market has finally worked out that gas molecules are quite difficult to get and valuable. I think Mahalo moving forward will provide a low-cost sub surface solution and I think the scale of the Galilee and the fact that we’ve come together with a farm in and we are planning a well for 1Q. I think all of those things combining to drive the value,” McCaul said.
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