Australia has the most attractive shale gas prospects outside North America, according to Magnum Hunter Resources Corp., a Houston-based producer that says it has scoured the world looking for deposits of the gas that has revolutionized energy supply in the U.S.

“We’ve looked at Colombia, we’ve looked at Mexico, we’ve looked at Argentina, we’ve looked at Poland, and we’ve looked at China of course,” Kip Ferguson, executive vice president of exploration at the U.S. shale operator, said in an interview in Sydney. “None of those areas are prepared to allow the unconventional technologies to develop these plays. They aren’t as far advanced as Australia.”

The Cooper Basin, an area straddling the border of South Australia and Queensland states, has also lured investment from Chevron Corp. and BG Group Plc ahead of expected shortages of the fuel to feed more than $60 billion of liquefied natural gas projects in eastern Australia that will ship to Japan, South Korea and China.

Explorers Santos Ltd. and Beach Energy Ltd. are among Australian companies developing shale properties in the Cooper Basin as demand for gas on Australia’s east coast is forecast by the government to triple by the end of the decade.

‘Tied Up’

“Within 12 months, you’re not going to have the ability to find a deal, or find acreage, in the Cooper,” said Ferguson, whose company has shale gas stakes in the Marcellus, Utica and Williston and Bakken regions in the U.S. and Canada. “And North America is pretty well tied up.”

Magnum Hunter agreed to become the largest shareholder of Perth-based New Standard Energy Ltd. last month, which will bring the company’s technical expertise to the Australian company’s planned Cooper Basin exploration program.

“The next 12 to 18 months are going to see some interesting scrambling going on in the Cooper,” New Standard Energy’s managing director Phil Thick said in the interview.

‘Big Play’

Australia has the seventh-biggest potential shale gas resources and sixth-biggest shale oil resources in the world, the U.S. Energy Information Administration estimated last June. The Cooper, with existing gas processing and transportation infrastructure, may be the nation’s first commercial source of shale oil and gas, according to the EIA’s report.

Producers globally are seeking to emulate the U.S., where horizontal drilling and hydraulic fracturing, or fracing, has unlocked oil and gas supplies trapped in shale rock formations.

Australia “is primed to become the next big play” in the fracing market, ahead of China and Argentina, Boston-based Lux Research said in a Jan. 14 report on its website.

The biggest obstacle in Australia is drilling well costs, which are as much as three times more than in the U.S., said Thick, whose company is also ConocoPhillips’s partner in a shale exploration program in Western Australia.

New Standard Energy said it expects to work with Magnum Hunter to evaluate future expansion opportunities in Australia.

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