South Australia oil discovery could boost local industry

A recent report by Brisbane-based Linc Energy claimed South Australia contained enough oil to make Australia self-sufficient in the liquid fuel.
The company announced that drilling and seismic exploration had revealed the Arckaringa Basin, which surrounds Coober Pedy in the northern part of the state, had between 3.5 billion and 233 billion barrels (bbbls) of untapped oil.
On the day of the announcement, the company’s shares rose by 23 per cent. Linc managing director and chief executive Peter Bond told AdelaideNow that if the higher estimates were correct, the basin would be “several times bigger than all of the oil in Australia”, with the
possibility of each well flowing at between 1000bbls and 2000bbls per day.
“If the Arckaringa [Basin] plays out the way we hope it will, and the way our independent reports have shown, it’s one of the key prospective territories in the world at the moment,” he said.
The report found that the Stuart Range Formation, a large area within the basin, was rich in oil-prone kerogen that formed the basis of a new shale oil play along with the underlying Boorthanna Formation. Linc stated that the results were consistent with its view that “formations within the Arckaringa Basin have excellent resource play potential with total organic carbon levels, permeability, porosity and thickness that compare favourably to prolific US unconventional liquids plays, such as the Bakken and Eagle Ford”.
SA Mineral Resources Development minister Tom Koutsantonis said the latest results gave the state a promising future in the oil and gas industry. “Shale gas and shale oil will be a key part to securing Australia’s energy security now and in the future,” he said.
Mr Bond told The Age that Linc was not putting a value on the resource estimate, as shale was valued per acre and not per barrel.
“If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources,” he said.
The Adelaide Advertiser reported that the find could be worth $20 trillion, but Mr Bond quickly dispelled the rumours. “That’s not our valuation,” Mr Bond told business news website BusinessDay. “I don’t know who did that but someone’s got a calculator out and come up with that number.
“We wouldn’t put a valuation on it at this stage. It’s too hard.”
Last year Linc pulled an advert from newspapers that claimed its technology to convert coal into gas, then diesel, could produce a barrel of clean fuel for about $30.
Linc wholly owns about 65,000 square kilometres of licenses and applications in the 80,000sqkm Arckaringa Basin and plans to drill up to six horizontal wells to confirm the estimated resources.
To date, Linc has spent $130 million on exploration in the Arckaringa Basin. It is being advertised by Barclays Bank on strategic options, including looking for a farm-in partner to spend up to $300 million to help develop the resources.

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