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.
Recommended Reading
Midstream M&A Adjusts After E&Ps’ Rampant Permian Consolidation
2024-10-18 - Scott Brown, CEO of the Midland Basin’s Canes Midstream, said he believes the Permian Basin still has plenty of runway for growth and development.
Post Oak-backed Quantent Closes Haynesville Deal in North Louisiana
2024-09-09 - Quantent Energy Partners’ initial Haynesville Shale acquisition comes as Post Oak Energy Capital closes an equity commitment for the E&P.
Analyst: Is Jerry Jones Making a Run to Take Comstock Private?
2024-09-20 - After buying more than 13.4 million Comstock shares in August, analysts wonder if Dallas Cowboys owner Jerry Jones might split the tackles and run downhill toward a go-private buyout of the Haynesville Shale gas producer.
Aethon, Murphy Refinance Debt as Fed Slashes Interest Rates
2024-09-20 - The E&Ps expect to issue new notes toward redeeming a combined $1.6 billion of existing debt, while the debt-pricing guide—the Fed funds rate—was cut on Sept. 18 from 5.5% to 5%.
Dividends Declared Sept.16 through Sept. 26
2024-09-27 - Here is a compilation of dividends declared from select upstream, midstream and service and supply companies.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.