Real To Get Real on Frac Job?
Published 18-SEP-2015 11:32 A.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
It is thought Real Energy (ASX:RLE) could be close to announcing a contractor for a vital five-stage frac job on its Tamarama-1 and Queenscliff-1 wells in the Cooper Basin.
At the start of the month RLE announced that a previous independent study on the two wells at ATP927P had found that a five-stage frac would be most effective for maxiumum flow from the wells.
It subsequently told the market that it had opened up a tender process for contractors to compete for the job, which could potentially see a further firming up of the resource at the permit.
Independent experts DeGolyer and MacNaughton, based on the drilling of the un-fracced wells, said that the permit had an oil and gas in place resource of 13.76 trillion cubic feet of gas, up 141% on previous estimates.
The experts also said the permit has a contingent resource of up to 672 billion cubic feet.
However, getting the gas to flow following a frac job at the wells would firm up the numbers further and show the market that the gas can be produced.
Offtake deal
The permit is at the centre of a Letter Of Intent inked with major industrial player Incitec Pivot for the supply of gas to the industrial major for ten years , or 110 petajoules of gas.
While the deal isn’t sealed yet, it gives Real Energy more confidence to develop its resource in the Toolachee and Patchawarra Formations, prolific geology in the Cooper Basin.
The LOI was signed on the back of an expected tight gas market in years to come thanks to the export of gas from LNG projects in Gladstone, Queensland.
Demand profile for east coast gas market
While the proponents of the project are basing their projects off coal seam gas reserves in Queensland, they have also had to dip into the third party gas market for additional supply.
This has increased the pressure on the existing gas supply, which industrial manufacturers such as Incitec Pivot would normally tap for their projects.
However, with a comparative lack of supply coming on, the manufacturers are keen to play a role in bringing on new supply into the market, attempting to tie down long-term gas supply deals with early-stage explorers such as RLE.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
