Morgan Stanley has a nice little note today on QLD’s getting fracced:
Increased fraccing activity in Queensland highlights operators are looking at ways to improve well performance. Santos has the most to gain (over a longer-term time frame) given its reliance on third-party gas.
We have analysed the last 12 quarters of data on the CSG industry from APPEA. The number of frac jobs is increasing Exhibit 1. It is likely new completion techniques are being trialled to improve production performance as the industry looks for ways to improve production from lower quality coals. This has been confirmed by industry contacts. As operators move from the higher producing regions (known as sweet spots) they need to improve production and reduce drilling costs to improve economics.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
