Seeking Alpha

Shale’s "next big play" draws Magnum Hunter to Australia

  • Australia has the most attractive shale gas prospects outside North America, according to Magnum Hunter Resources (MHR -0.5%), which says it has scoured the world looking for deposits of the gas that has revolutionized energy supply in the U.S.
  • The Cooper Basin, straddling the border of South Australia and Queensland states, also has lured investment from Chevron (CVX) and BG Group (BRGYY, BRGXF) ahead of expected shortages of the fuel to feed more than $60B of liquefied natural gas projects in eastern Australia that will ship to Asia.
  • MHR recently agreed to become the largest shareholder of Australia's New Standard Energy, which will bring its technical expertise to its planned Cooper Basin exploration program.
Comments (4)
  • Oh MHR why must you complicate things
    17 Jan, 11:47 AM Reply Like
  • They're getting the shares in addition to cash in return for selling their remaining EF acreage to New Standard. The shares are basically a "free" call option on New Standard's acreage in the Cooper Basin. I agree, not sure I want them holding stock in other companies, but since the stock is in addition to the cash component of the deal, I'm ok with it.

     

    This news was actually released about a month ago by New Standard (their shareholders still have to vote on the deal) and didnt get picked up anywhere. I heard about it through the Yahoo Message boards on MHR, which aren't great, but there are a couple ppl who seem to be intelligent on there for MHR.
    17 Jan, 12:32 PM Reply Like
  • Water will be a binding constraint in the Cooper basin and the right mix of skilled labor will be difficult to find. Well capital and operating costs are likely to be significantly higher than in the Permian.....significant production is some years away but in time the Cooper Basin will indeed be a globally significant source of natural gas
    17 Jan, 01:37 PM Reply Like
  • Any chance you could point me in the right direction to find out more info on the basin? Thanks.
    17 Jan, 02:09 PM Reply Like
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