NEW STANDARD ENERGY Some Lessons Learned from the US Shale Gas Game Change Australian Resources Conference 14 November 2012 Sam Willis Executive Director Dr Mark Hagan Technical Director March 2008 1
Page 2 Presentation Overview The US Production Experience The Effects on US Industry and Environment Impact on Shale Gas Explorers and Producers Education and Innovation Applying the US Lessons to Australia New Standards Role
Page 3 US Shale Gas Experience What Happened 2012 2006 21.6TCF (23% of US 1.1TCF production) (5.9% of US production) 1996 0.3TCF (1.6% of US production) Source: US Energy Information Administration (EIA)
Page 4 Game Changing Results Significant Global Implications US Crude oil imports down significantly currently 20% US to over take Saudi Arabia as largest oil producer by 2020 (IEA) North America to become net oil exporter around…
Page 5 Gas Prices US hits 2 gas Sustained price declines since 2008 largely supply driven Reports of many wells drilled, but not put on production awaiting higher prices US companies now generally targeting liquids rich…
Page 6 Industry Effects Abundant Cheap Gas Nirvana for industry driving competitive scenario Manufacturing operations onshoring US chemicals firms re-opening and building new plants Coal fired generation plants closing Market…
Page 7 Environmental and Economic Effects Huge CO2 reduction a direct result Shale gas development directly responsible for a decrease in CO2 emissions for the US Total CO2 emissions reduced by 20% since 2007 due to GFC and…
Page 8 Corporate Activity Announce date Acquirer Seller Announce USD/acre Acreage Shale play value exposure Major key to success based (US millions) 18 May 2009 ENI SpA Quicksilver Resources Inc. 280 13,000 Barnett on large…
Page 9 Community Concerns New technologies bring new debates fraccing painted as a dirty word Significant community concerns raised very legitimate in the absence of effective communication from industry Not helped by traditionally…
Page 10 Rapid Technical Innovation Geological Modelling Integration of 3D seismic, geo-mechanical and mineralogy data to create reservoir earth models Used to determine gas volume, stress regimes, brittleness, recovery factors…
Page 11 Technical Lessons Not all shales are the same Each shale play has a different matrix of There is greater requirement for scientific analysis unique properties and technology in unconventional plays versus simply drilling…
Applying the US Lessons to Australia Sam Willis Executive Director Dr Mark Hagan Technical Director March 2008 12
Page 13 The Australian Opportunity US Department of Energy Independent assessments of Goldwyer shale in Canning Basin provide strong support for New Standards focus: US Department of Energy World Shale Gas Resources Canning Basin…
Page 14 Challenges in Australia Most prospective shale gas areas in remote, frontier locations (Canning, Cooper, Georgina Basins). Issues include infrastructure, geological understanding, water and costs of operating…
Page 15 How do we apply the lessons learned in the US Investing now in the roads, airstrips and general infrastructure to support future operations Opening the Frontier Each hole drilled for the next 12 months is likely to be a…
Page 16 How the US experience might play out in Australia Unlikely to repeat in Australia in short to mid term earlier stage of sector and much higher starting price (particularly in WA) and ability to export LNG Gas Prices…
Page 17 WA Energy Market Attractive Exploration Environment WA Onshore Gas Demand-Supply Equation Favourable Onshore Outlook Sustained upward pressure on WA TJ/day gas prices 1600 Limited existing supply side 1400…
Page 18 Who is New Standard Australian Shale and Tight Gas with early mover advantage In Australias largest shale gas province Canning Basin with over 764Tcf of potential risked gas in place* Partnered with ConocoPhillips…
Page 19 What are we doing Shale Gas, with oil and wet Shale and Tight Gas Shale Gas, oil + wet gas gas potential 5,500km2 or 1.36m gross potential ConocoPhillips partnership - acres 5,900 km2 or 1.46m gross 119.5m earn in…
Page 20 Well Positioned for WA Energy Market Large Acreage Position in Strong, Growing Market Substantial acreage position, ahead of the curve West Australian focus dominant land position with total acreage of 14 million gross…
NEW STANDARD ENERGY The New Energy Frontier For Further Information Contact: Sam Willis Managing Director ph: +61 8 9481 7477 web: www.newstandard.com.au Sam Willis Executive Director Dr Mark Hagan Technical Director…
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