Oil shale discovery in South Australia proves significant

By Phaedra Friend Troy

Junior explorer Linc Energy has discovered oil shale in the Arckaringa Basin of South Australia. The Arck 1 well was drilled into the Stuart Range formation, transecting an oil shale reservoir that measures between 406 feet and 124 feet deep and spans some 284,000 acres.

This is a major discovery, and will likely prove extremely profitable for Linc and South Australia.

Initial estimates as to the size of the discovery position the shale to hold more than 200 billion tonnes of unconventional oil.

"This is the first time shale oil has been specifically targeted in South Australia's Arckaringa Basin, which has historically been the focus of coal exploration," said Minister for Mineral Resources Development Tom Koutsantonis. "The discovery at Linc's Arck 1 stratigraphic well in PEL 122 reinforces the prospectivity for shale oil and the Arckaringa Basin."

Shale drilling and development was just made possible in the last decade with the combination of horizontal drilling and hydraulic fracturing. Shale development began in the natural gas shale formations of the Marcellus, Barnett, Haynesville and others in the US.

Operators have now perfected the drilling and development of liquids-rich shale formations, shifting interest to oil and condensate. Rigs are actively drilling the Bakken Shale of North Dakota and Eagle Ford Shale of South Texas, as well as the emerging Niobrara, Utica, Woodford, Wolfcamp and Monterrey Shales.

Other nations are trying to create shale booms of their own, with China, India, Poland and Argentina actively pursuing shale developments.

Nonetheless, this is the first announced shale oil discovery outside of the US, and the positive affect it will have on the economy in South Australia will be major – just look at the jobs forecast in North Dakota and South Texas. (Most hotels and real estate are full, and small towns are booming with oilfield workers and engineers.)

This shale discovery, alongside Western Australia's mega LNG projects and Queensland's innovative coal-seam-gas-to-LNG (CSG-to-LNG) projects may very well catapult the nation to a new high. Certainly, Australia is worth a second look for investments both in the energy industry and all the markets that would support the swelling workforce there.

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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.