News is carrying an exciting story from Linc Energy:
SOUTH Australia is sitting on oil potentially worth more than $20 trillion, independent reports claim – enough to turn Australia into a self-sufficient fuel producer.
Brisbane company Linc Energy yesterday released two reports, based on drilling and seismic exploration, estimating the amount of oil in the as yet untapped Arckaringa Basin surrounding Coober Pedy ranging from 3.5 billion to 233 billion barrels of oil.
At the higher end, this would be “several times bigger than all of the oil in Australia”, Linc managing director Peter Bond said.
This has the potential to turn Australia from an oil importer to an oil exporter.
…Linc has hired Barclays Bank to find an investment partner for the next stage of the project, costing $150-$300 million.
Not to poo poo the possibility but that’s a pretty broad range, somewhere between 3.5 and 233 billion barrels, the upper end of which would put us slightly behind Saudi Arabian reserves. Hope it’s true but one can’t help wondering about the last sentence.
Anyway, the share price is going nuts:
Their share price is to the moon on all this publicity!
And that’s the whole point of this
informercialPR release.Ah, the myths that surround tight oil! It’s a mirage, I tell you. Do some research about the tight oil situation in the US, where typical decline rates of 30 to 60% combined with progressively lower flow rates or greater spending per well (more lateral bores, more frac stages) mean declining production in less than two years (unless oil prices can climb at least 10% per year every year).
As for the estimates, at the low end, it’s enough oil to run the world for 40 days.
And there’s no pipeline structure to carry it (think a decade of costly development).
But hey. If it makes you feel optimistic, go for it!
you should see the rumors circulating in greece these days
trillions and trillions of oil, gas, gold, pirate treasures, Alex the Great’s shorts, you name it
Where do I buy shares, quick?
funny enough it’s not as terrible idea as it sounds
Share price up??
stagger me
Ah good.
The variation is due to the cost benefit of extracting the oil – at $50 pb there may only be 5 billion barrels, but at $100 pb there may be 100 billion barrels etc.
Hope that helps.
Are you saying that this is the actual cost curve here?
Not the actual cost curve – did some reading about this when it first came out asked some questions and this is the explanation I got. Made sense.
The response discussed the actual means used to gauge the amount of oil available, huge sums having already been spent, and the results are fairly accurate as to how much is there.
I considered the variation as an estimate of potential oil vs potential oil on cost curve and it makes absolutely no sense considering the dollars being invested for such a limited return – so – I made the assumption that the estimates were the cost curve.
Sorry for being so absolute – was misleading.
do numbers $50 pb or $100 pb include environmental damage? How about efficiency?
These were the boys with whom Roman Abramovih had a chat when he popped into Brosbane late last year.
This is an old story being recycled by News Ltd papers and possibly spruiked by the SA Goverment themselves because things have been rather grim in SA recently with the loss of jobs in the car industry and the scaling down of Olympic Dam. South Australia is desperate for new revenue streams and they’ve been trying to tout themselves as the new resource state so they can attract investment.
Shale is extremely polluting and energy intensive to produce – you only have to see the kerfuffle over the Gladstone project (which was on a very small scale) to know that environmentalists will be frothing at the mouth.
The United States is now the worlds largest oil producer due to it’s massive investment in shale oil.
Please see here
http://thinkprogress.org/climate/2012/03/13/443979/north-dakotas-bakken-shale-boom-is-visible-from-space/
Please see here
Does the U.S. Really Have More Oil than Saudi Arabia?
dont confuse reserves with production. there is only about a million barrels difference between SA and USA with russia at number two. its possible they took the number one spot the EIA/US DoE stats will confirm over the course of this year
why would you post that – the article is claiming that the oil from this process is not even commercially viable – the article is nonsense.
The North Dakota oil extraction is immense and is rivalling Texas – see my link.
Cheers.
The link I posted is by a real expert. I suggest you go back and re-read it, slowly and carefully, both energywonk and Hellenomania
Thanks r2m I am a hydrocarbon geo and work in energy markets mate. I guess that makes me an expert too? If you read my comment I was pointing out that reserves of whatever class 1p 2p 3p etc are not the same as prodcution. USA is third largest oil producer in world it only takes the Saudis to ramp some production down and the us shale oil to come on stream quicker and they will quite easily be worlds largest oil producer again. Is this sustainable maybe it depends on the decline rates which are certainly not as good as good as many of the ponzi producers claim. I have posted that link before also and some others that l it’s many of the formations and the prices required in gas and oil to make them viable. Many are not. Good to see you are using the drum though. Great site.
Sorry energywonk, I misread your response.
Hellenomania seems to be confusing tight oil with shale oil, or is the news ltd report doing that?
<>
Can I see the evidence that it is more polluting than forms of oil extraction.
Besides in case you’ve never been to Coopper Pedy it is in the middle of nowhere. Nobody will care less if there is a bit of pollution around there. It is probably the ideal place to have that sort of intensive drilling activity. The place is already riddled with opal mines already.
No idea of course if the reserves exist.
Not exactly what you asked for but I found it quite interesting.
http://www.guardian.co.uk/environment/2012/dec/04/north-dakota-fracking-boom-family
Besides in case you’ve never been to Coopper Pedy it is in the middle of nowhere. Nobody will care less if there is a bit of pollution around there.
What!!! Property professor will have a heart attack if he saw this.
You mean this “An original manually excavated dugout, reflective of its’ heritage” (<- honest, not my words!) property built by Fred Flintstone won't have a bidding war to take it from $85k to at $1 million soon??
http://www.realestate.com.au/propertydetails.ds?id=112509679
(h/t to Re4Ransom for that gem)
Upstream emission calcs in hydrocarbon production are opaque across the suite. It’s debatable on either side of the argument. But rough eroei calcs show me that as we move down the unconventional hydrocarbon path the economics become tighter and the emissions greater. Oil sands for instance require a lot more energy to upgrade than pulling 100 barrels of oil out of the ground for one barrel input like in the glory days of Middle East. Worse for shale oil etc. here’s a good summary
http://energy.geothunder.com/2011/10/11/eroei-shale-oil-and-shale-gas/
Also ask yourself why is LNG exempt from the carbon tax?? That reveals a lot right there.
Yep, It has been coming up now and then in News Ltd papers for the past fifty years to my personal knowledge. I remember my grade five teacher debunking it during a geography lesson in 1963.
Of course other sources of oil were plentiful then and perhaps the economics have improved. But I would put my money on either; a slow news day and a looming deadline for copy, or some company promoters wanting to make a killing out of gullible suck…er investors. Anybody care to wager?
Don’t be a gullible sucker, mate.
that’s no sucker! check out it’s other recent posts.
Hyperbowl.
news.com.au is a 5 day old version of imgur/reddit, with barely hidden PR releases amongst the usual titillating stories about celebrities etc.
In other words, great for entertainment purposes, but its not “news” or “media”.
The SMage is wandering down this road too – I’ve stopped reading it for anything but pure entertainment. AFR was catching me again, but since I went back to trading, I haven’t read it – its basically noise anyway after the fact.
/rantover
It’s the new norm! You’re new.
Don’t you remember ya last nom de blog?
http://www.lincenergy.com/data/asxpdf/ASX-LNC-458.pdf
In all seriousness though, if this does come to fruition it is dog damn huge!
and if it doesn’t someone has offloaded his shares with a nice fat profit
win-win
Up to $2.50 from 50c in Nov. A 500% gain in 2 months.
Every man and his dog jumped on this one today. There’s a few lucky people rubbing their hands together saying “thank dog for PR releases dressed up as news”
If there is anything of substance in it then presumably we can forget about the need to worry about having a productive economy. We can presumably put up the shutters on immigration (but allow Philipinos in to perform menial tasks – a la the Persian Gulf) and presumably prepare ourselves for some significant and overt US support for our defence capabilities.
Presumably we would need to bury some environmental qualms somewhere where we wont be able to remember them too…
The only thing is that here the money doesn’t get spread out to the few actually citizens like it does over there, well not in the same way anyway.
It’s important to keep the peasants happy in an absolute theocracy / kingdom.
But they all wander around like they too are the overlords. And they sort of are compared to the much larger in number guest workers.
Depends – there is an awful lot of preferential treatment going on, and if you are out – you are out, national or not. And there are a lot on the out.
The serfs from SEA and Subcontinent – well, yes – first world slavery rises again – there is a great VICE doco on it.
Use the energy to build halogen lamps to grow trees at night with a desal plant on lake Eyre. Sorry Kati Thanda.
Yep, the horrors of being Norwegian.
lol
Now we just need BP to strike black gold in the Bight and we’re sitting pretty!
Lookout, the property professor is back:
“SA TAFE property investment course coordinator Peter Koulizos says the news is “very exciting” and potentially much bigger than the Olympic Dam project.”
http://www.apimagazine.com.au/api-online/news/2013/01/coober-pedy-strikes-black-gold
h/t Mav
Apparently, nobody told Linc Energy CEO that he has hit the mother of all jackpots. But he has a good sense of humour..
http://www.smh.com.au/business/20-trillion–not-reality-check-for-linc-oil-find-20130124-2d8zf.html
Ta mav.
“South Australian real estate set for the next big boom after $20 trillion oil reserve discovery!”
“Buy now before cashed up riggers push house prices to the MOON!”
For goodness sake tell Arch.
He needs to know
Hey dam are you set?
Australia’s newest taxpayer. Irrational expectations. Fact checking would have circumvented publication.
http://www.prosper.org.au/2013/01/24/australias-newest-taxpayer
I note one correction, others inevitable.
RE for you champ.
Sign up for another.
Double in 7 yrs.
Get one barrel of oil you form shale you need to waste 1 to 5 barrels of water. I’ve been there, does not look like an oasis.
Yeah I forget to mention that.
From the article I linked above:
The oil shale in
the Green RiverSouth Australia looks like rock. Unlike the hydrocarbons in the tight oil formations, the oil shale (kerogen) consists of very heavy hydrocarbons that are solid. In that way, oil shale more resembles coal than oil. Oil shale is essentially oil that Mother Nature did not finish cooking, and thus to convert it into oil, heat has to be added. The energy requirements — plus the fact that oil shale production requires a lot of water in a very dry environment — have kept oil shale commercialization out of reach for over 100 years.May have commercial potential but so does recycling fish and chip oil for running cars. Need to see more numbers before deciding if it is commercially viable.