BRISBANE, Australia -- The Arckaringa Basin is in South Australia west of the Cooper Basin. Comparisons with the Eagle Ford basin in the U.S. show just what kinds of challenges face the nascent shale gas industry in Australia.

The Eagle Ford play has about 12 million acres overall, and more than 80 operators are active. The Arckaringa Basin has 20 million acres overall and one single operator, Linc Energy Ltd., for about 16 million acres. Only 19 significant wells have been drilled in the Arckaringa, and there are no producing fields. More than 4,000 wells were drilled in the Eagle Ford during the last 12 months, and the play includes 38 fields. Resources are estimated at 3.5 Bboe in the Arckaringa and 3 Bboe in the Eagle Ford.

“We don’t have the capital to drill 100 wells, especially when those wells cost $8 million to $10 million,” Don Schofield, president, Linc Energy, told the DUG Australia conference in Brisbane on Aug. 29. “We’re looking for joint venture partners and alliances. We’ve got a clean run on this acreage for 10 to 15 years without any competition. It will take about $2 billion to drill 300 wells.”

The company noted that there is a lot of exploration work yet to be done. Linc’s subsidiary, SAPEX Ltd., has 10 petroleum exploration licenses (PEL) covering 16 million acres, two PEL applications, and seven exploration licenses for coal and other minerals.

“Coal was what led us to the Arckaringa before unconventional became popular. We have about 4,313 line km (2,681 miles) of 2-D seismic, and no 3-D, in the largely unexplored basin. We have 19 wells that penetrate the zones of interest, so we don’t have a lot of data,” he said. “We’re in the exploration phase right now. We have mapped the tops and bottoms of the formations in seismic, which are carried across the basin.”

The shales of interest are in the Permian section and are marine shales. The shales are found from 600 to 2,000 m (2,000 to 7,000 ft) deep and range in thickness from 70 m to 1,200 m (230 ft to 4,000 ft). Porosity is 5% to 17% with total organic compounds (TOC) from 4.5% to 10%. The company is currently approaching the unconventional resources using conventional methods.

Linc discovered oil in the Maglia-1 well in 2011. The oil was found within coal seams and dripping from two sandstones between the coals. “The oil migrated from much deeper – more than 1 km – and that started us thinking about oil,” Schofield said.

The company took cores in its Arck-1 well and found very organic-rich shales through the Stuart Range formation. “TOC was over 4.5% with some as high as 10%. Vitrinite reflectance was around 0.6%,” he added.

The resources are there. Linc used DeGolyer and MacNaughton, and Gustavson for prospective resource assessments. The former estimated unrisked prospective resources at 95 Bboe, while the latter set the number at 232 Bboe.

The company plans to take additional cores from hydrocarbon zones and do extensive technical analysis of the cores. Additional 2-D and 3-D seismic surveys are planned. Linc will test all producible hydrocarbon zones, develop a stimulation strategy and pilot horizontal wells, he explained.

The next step for the company is to enter into some commercial deals and joint ventures. “We want to start alliances on the services side.

“It is important to Linc Energy to work with traditional owners. We have an existing petroleum system with great characteristics. We have a large acreage position. People that look at it like it,” Schofield said.

Contact the author, Scott Weeden, at sweeden@hartenergy.com.

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