Over the past few days, I have released information on what could be the largest shale oil find ever recorded.
It's located in an area of Australia called the Arckaringa Basin and contains as much as 233 billion barrels (or more) of recoverable shale oil.
That's more than all of the estimated oil in Iran, Iraq, Canada, or Venezuela. And it's just 30 billion barrels shy of the estimated reserves in all of Saudi Arabia.
The discovery at the Arckaringa basin is so big it's already prompting some observers to begin talking about energy independence for Australia, much in the same way Americans did after similar discoveries in the Bakken, Marcellus, Eagle Ford, and Utica basins.
And there is one small company that controls what is shaping up to be the biggest worldwide oil project to hit in decades.
The Opportunity in the Arckaringa Basin
It's a company called Linc Energy (OTC: LNCGY).
That a company this small is in the driver's seat in a find this big is one of the major new wrinkles in these mega-projects.
It used to be (and we are only talking about four or five years back), that the top international majors would be calling the shots on mega- billion dollar projects like this one.
But what's happening in the Arckaringa Basin is occurring more frequently -- especially in this part of the South Pacific.
Today, small cap companies are controlling access to some of the biggest shale projects on the planet, requiring the big boys to rethink their strategies.
These developments provide individual investors some major opportunities to buy into projects with small companies at low cost or ride in on the backs of the majors and oil field service producers coming in.
And if you learn the right way to invest, there is some serious money to be made down under.
Both shale/tight oil and shale gas have significantly changed the hydrocarbon production landscape. Until recently, the emphasis has been on North American production.
However, studies from the U.S. Geological Survey, the International Energy Agency, and even OPEC itself have all concluded shale oil and gas is prevalent elsewhere in the world.
And that has led to new targets for major development.
The Shale Oil Boom Continues Down Under
For example, a second event is unfolding just north of Australia, where another small company just happens to control access to a massive project. This one is in Papua New Guinea, and it has some of the largest international majors just drooling over the idea of being involved.
However, the parade of big companies seeking a piece of significant projects controlled by much smaller operators hardly ends there, especially in this part of the world.
Chevron (NYSE: CVX) once again made news early yesterday morning by announcing it had agreed to pay as much as $349 million to join Australian minnow Beach Energy (OTC: BCHEY) in two separate projects.
Both are shale gas plays - one in South Australia and the other in Queensland.
Now despite the huge projects Chevron already runs further west (the ones I know quite well from my work there), these two new concessions amount to the company's first foray into Australian shale gas. These are Cooper basin developments, where several projects are into producing shale gas. Chevron is likely to take over controlling interest (as much as 60% in the first), while settling for a bit more than a third in the second.
Beach Energy is an Adelaide-based producer and does have depository receipts trading OTC in New York. However, the issue is that these shares have virtually no liquidity. No shares traded on Friday and the average number for the past three months is just 33 shares a day.
Therefore, there will be a likely big bounce in these shares, but there will be no way to control the rapid price rise and subsequent difficulty in exiting a position. Beach has greater liquidity on the Australian Securities Exchange, but trading on the ASX remains difficult for many non-Australian investors.
Nonetheless, the parade of internationals moving into Australian projects continues. Chevron joins the likes of U.S. companies ConocoPhillips (NYSE: COP) and Hess (NYSE: HES), Norwegian major Statoil (NYSE: STO) and U.K.'s BG Group (OTC: BRGYY), a more liquid depository receipt opportunity.
To sweeten the pot, the Australian government has recently estimated there may be as much as 400 trillion cubic feet (11.3 trillion cubic meters) of shale gas in the country.
So don't be surprised if there are more such announcements of more big projects controlled by small local companies coming in the near future.
As for the massive find in the Arkaringa Basin, the real investment play is with the companies coming in to provide the essential working capital for field development and to provide the essential field services to pull it all off.
You can learn more about this exciting new find by clicking here.
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Canadian oil sands deposits alone, not including conventional oil reserves, is estimated to be 2.5 TRILLION barrels of oil. That is trillion with a "T", not billion. That is according to oilsands.infomine.com.
I cannot believe that this publication, Money Morning, especially Dr. Kent Moors, continually gives the numbers for Canadian oil reserves at between 170 billion and 180 billion barrels. That is just Alberta alone. There are huge reserves in Saskatewan and British Columbia, and huge oil reserves off the coast of Newfoundland and Nova Scotia. And that doesn't even include the northern territories. And those touted numbers are only the most easily accessible bitumin.
Good for Australia, that they found that big pool of oil. But it is no where near the Canadian amount of reserves.
When is Money Morning going to do a COMPREHENSIVE report on the oil industry in Canada??????
I don't see the 2.5 trillion barrels you are citing… OPEC cites 175 billion barrels of reserves for all of Canada, conventional and non conventional included.
Edition:
I see what you mean by 2.5 trillion but that is 2.5 trillion barrels in bitumen…. that is some thick nasty stuff and is not economical at today's prices. The 175 Billion reserves that are cited by everyone is economical with current technology.
It is possible to mine the 5888888 trillion in gold reserves on meteors that are in the milky way…. but it is highly unlikely in our lifetimes my friend.
hi
As I wrote somne years ago, (at the time) only 1-12% of the world's energy resources had been discovered. Over the last few years we've increased that to 20-22%. That still leaves a lot of energy waiting, hoping, to be discovered and developed. The real opportunity isn't with the Top 5, it's with the second tier of exploration and development companies, looking for ways to make their mark. A huge risk is that as current development comes to market, demand may become less than supply, and the real and phony competition posed by OPEC, and others now forming, to "assist in maintaining market equilibrium" will sucumb to true market forces, and prices will go lower, even much lower, by as much as 60-70% from current levels. Geography and local production will also enter the equation.
I would be curious to find out how long it would 'take' to get the Australian Shale Gas operations into Production. Some of those smaller companies could run out of money before they even get started. The bigger dinasaurs might be slow-moving so we wait and wait to see a return on investment. In the meantime, I will keep a watch.
i would like to know who i have to talk to for stocks. i would like to be a part of australias discovery. im not rich by all means. im new in this. i want to able to buy a few stocks. why does all the big fish get the best. the little fish would like some food too. so let me know a number to calll or to speak to some one. thank you, an have a great day. DAN SOLAZZO,SR.
The shale oil plant is already in place but in act of utter stupidity the Queensland government shelved it Peter Beatty the then premier gave it plus all the rights to link. Corrupption ? Yes link paid 2 million for a plant which cost 200 million to build . Sound like a safe investment?
Greetings,
I also would like to know how to obtains shares n the Australian oil discovery.
Have made lots of enquiries with different companies here but they say they do not have them registered .
Hope you can hep.
Be Blessed.
Adele
I have beemn investing for 35 years amd I still consider myself a 'little fish' I have had two major subscriptions with affiliates of this group. They gave me best buys for three 'mouse' penny stocks that turned into elephants. I took me a long long time to be well heeled enough to able to take the market in stride, when the strides went backward on me, and still be able to sleep at night. It's a slow go until a ten bagger comes along.
Central Petroleum has even more oil, gas, and coal in Central Australia. About 1 trillion tonnes of coal –> GTL/UCG; 300 billion barrels of oil conventional and unconventional; and trillions of cubic feet of gas; along with helium.
I also had shares in Linc energy, great company.