Large, lightly explored Cooper Basin foothold
Real Energy, (REL.AU) holds 100% in more than two million acres of Cooper and Eromanga Basin acreage where it is chasing the large basin centred gas play within the Toolachee and Patchawarra formations. Although on the periphery of established plays, the work programmes of the numerous players advancing adjacent or nearby acreage have already demonstrated substantial endowments of both conventional and unconventional gas. If Real Energy can prove up its resource estimate, it is well placed to tap into a mature network of above-ground infrastructure and join a wholesale gas market that is surging to the favour of sellers on the back of LNG demand.
Cooper, Eromanga Basin focus
Real Energy holds outright title to three exploration permits (ATP917P, ATP927P and ATP1161PA) focussing on the Toolachee and Patchawarra formations already established as substantial continuous shale (Toolebuc) and basin-centred gas (Patchawarra) plays. Seismic has also indicated a number of conventional structural traps that present both oil and gas potential. An independent resource assessment estimates gross gas-in-place of 10.2tcf in the Toolachee and Patchawarra within its permits, while Toolebuc resources are estimated at 9.5tcf and 18.5bn bbls of oil.
Compelling above-ground commercial context
The Cooper and Eromanga basins are already the most mature in Australia on the back of major conventional oil and gas discoveries made since the 1960s. This has resulted in an extensive network of above-ground processing and transmission capacity available to those looking to commercialise new resource. The proliferation of new-build LNG capacity in Queensland is resulting in severe upward pricing adjustments in the East Australian wholesale gas market, again to the very substantial benefit of players, like Real Energy, with gas to potentially sell.
Financials: IPO complete
In December 2013 Real Energy completed an oversubscribed A$10m IPO that saw 40m new shares issued and an ASX listing completed at A$0.25/share. The new capital is intended to be deployed initially towards desktop activities (principally seismic reprocessing and G&G studies) to lead into a multi-well drilling programme scheduled for H2CY14. Recent success registered by Santos with three wells drilled in an adjoining permit has served to reinforce Real Energy’s confidence.
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