New Standard Energy (New Standard) will accelerate the progress of its shale gas exploration acreage in Western Australias Canning Basin following an internal and external review of the shale gas prospectivity in its exploration acreage.

The companys decision to accelerate shale gas exploration follows encouragement received from ongoing work with New Standards independent shale gas adviser that supports the view that although early stage, the Goldwyer formation in New Standards Canning Basin permits exhibits many of the necessary geological prerequisites for shale gas.

New Standard Managing Director Sam Willis said the decision to accelerate its shale gas exploration project would ensure New Standard Energy was well positioned at the forefront of shale gas exploration in Australia.

'Shale gas is rapidly becoming one of the biggest sources of gas production in the United States, and analysis of New Standards Canning Basin acreage indicates although early stage, it is highly prospective for shale gas exploration success in Australia,' he said.

'Our decision to accelerate the progress of our shale gas opportunity is the culmination of 12 months research and assessment of shale gas opportunities in New Standards Canning Basin exploration area, to identify the potential for large resources typical of shale gas plays.

'That preliminary work, undertaken largely since the company secured 100% control of the acreage through corporate transactions last year, has placed New Standard in an enviable position to progress its shale gas exploration program.'

Mr Willis said although shale gas exploration was still relatively new in Australia, shale gas exploration and production was commonplace in the United States, with a recent succession of large, high profile shale gas transactions emerging.

It is estimated that shale gas currently comprises approximately 15% (>2.0 TCF/year) of daily gas consumption in the US, and some analysts predict that unconventional gas production, including shale gas, will comprise as much as half of all total natural gas production in North America by 2020. A number of analysts predict a similar profile for shale gas may emerge in Europe.

'The enormous growth and success of the industry in the US has spread quickly throughout Europe and in our view it is only a matter of time before Australia follows suit,' Mr Willis said.

'Thirty per cent of all new gas discoveries in the United States are now shale gas, and many geological characteristics of gas bearing shales that exist in the US also exist in the Goldwyer shale of the Canning Basin. It is an early stage project but it is potentially very large and deserves additional attention to advance it further.'

'Improved international expertise in shale gas has pushed drilling success rates for shale gas higher than for conventional gas, and drilling costs are also coming down as expertise improves.'

Most shale gas discoveries contain significant quantities of gas, which helps offset increased drilling and production costs resulting from the need to drill horizontally and fracture stimulate (or frac) the shales to access contained hydrocarbons.

As a result of New Standards decision to accelerate its shale gas exploration project, New Standard will refine the next phases of work to be undertaken to advance the project further. A report from the independent shale gas consultant is expected in the next two months. It will provide third party assessment and assist New Standard to develop a focused work program to evaluate the rock properties of the Goldwyer shale and provide information for potential gas in place calculations and targets.

New Standard has also been actively assessing other shale gas opportunities outside the Canning Basin, with a view to adding to the shale gas portfolio if the appropriate opportunity arises.

Tags: New Standard Energy