Shale, Shale, Everywhere
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Shale oil and natural gas plays are seemingly everywhere these days making it harder and harder for investors to keep current with the vast number of these popular oil and gas areas. Here are some very early stage shale oil or natural gas plays that might one day add to the global supply of energy. These plays also carry high risk and should not be the used as the sole basis to make an investment in companies active here.
ConocoPhillips (NYSE: COP) is exploring the Goldwyer Shale in the Canning Basin in Australia and is engaged in a three well program here. The company and an Australian partner spud the first well in August 2012 and expects to reach total depth in late October 2012.
While it’s far too early to determine the potential of this Western Australian play, the U.S. Energy Information Administration reported in 2011 that the Goldwyer Shale contains 229 Tcf of risked recoverable natural gas.
CNOOC Ltd. (NYSE: CEO) and Exoma Energy are also active in Australia and are jointly exploring in the Galilee Basin in Queensland. The two operators are targeting the Toolebuc Shale and recently began drilling the twelfth exploration well in this exploration program. CNOOC Ltd. and Exoma Energy are assessing the Toolebuc Shale for both shale oil and shale gas potential and are analyzing core samples and other data from here.
Another early stage play is the Dadas Shale in Turkey, where several local Turkish operators have initiated exploration efforts. The first well will be drilled to a depth of approximately 8,500 feet and take three months to finish. The goal is to obtain core samples and determine the geological properties of the rock to help plan future drilling.
Royal Dutch Shell (NYSE: RDS-B) is prospecting in Turkey and began exploration in early September 2012 at the Saribugday 1 field in the southeastern part of the country. The company is partnering with Turkiye Petrolleri AO (TPAO) the Turkish state owned oil and gas company.
ExxonMobil (NYSE: XOM) is also looking to obtain a license to explore for shale gas in Turkey and hopes to partner with TPAO in the same general area.
Great Bear Petroleum LLC, a private oil and gas company, is exploring for shale oil near the North Slope of Alaska and has a 500,000 net acre position here. The company is testing the potential of the Shublik, Kingak and Hue Shale formations, which are the source rocks for the huge deposits of crude oil in the North Slope.
Great Bear Petroleum LLC started drilling the Alcor No. 1 well in June 2012 and the Merak No. 1 well in August 2012. The company is drilling these two wells vertically and plans to obtain core samples to learn more about the properties of the rocks in each zone.
Great Bear Petroleum LLC has filed with Alaska to drill the Alcor No. 2 well in the fall of 2012 and estimates a December 2012 finish date for this well. The company will then conduct hydraulic fracturing operations and flow tests on the well with a July 2013 estimated completion date.
Royale Energy is also involved with shale oil exploration in Alaska and won bids covering approximately 100,000 net acres in a lease sale held in December 2011. The company plans to drill between four and six wells to test the Shublik and Kingak formations as well as a shallower conventional oil zone on its leases.
Winstar Resources Ltd. is interested in the Tannezuft shale in the Ghadames basin in Tunisia. The company has four concession areas here and is looking for a partner to help assess this shale gas play. Winstar Resources Ltd. has committed to drilling one well in 2012 in partnership with the Tunisian state owned oil and gas company. The gross cost to drill and complete this well is $18 million and may be delayed until 2013, according to the Oil and Gas Journal.
Marathon Oil (NYSE: MRO) has interests in 11 concessions in Poland covering 2.3 million gross acres and is targeting various Lower Paleozoic shale gas formations. The company has drilled three exploratory wells here and plans to drill up to three additional wells by the end of 2012.
Some investors and energy analysts have called the abundance of shale resources in the United States a "game changer" that will lead to greater energy independence. These resources are also present in other countries and are starting to be tested by operators.
Investors should be careful here and recognize that these emerging shale plays are high risk exploration targets that may only have a small chance of success. Even if enough resources are found and can be developed on an economic basis, the value of these assets will usually not be recognized by the market until large scale development occurs.
shaleplays has no positions in the stocks mentioned above. The Motley Fool owns shares of ExxonMobil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.