Brisbane company in talks with US oil services company and others to develop shale prospects in central Australia

Brisbane-headquartered Linc Energy Ltd is in talks with two groups, including a US oil services company, to develop shale prospects in central Australia.

According to Chief Executive Officer Peter Bond, Linc expects to commence a five-well drilling program at the shale oil properties in South Australia’s Arckaringa Basin early next year at an initial cost of AU$ 15 million (US$ 14 million).

The company is moving ahead with the drilling plans “on the basis that one of the groups will commit between now and early next year to go in with us on that program,” Bond said. “It makes sense to get on with the drilling.”

Foreign expertise sought in a shale oil partner

Earlier this year the company hired Barclays Plc to help find a shale oil partner, and Bond confirmed Linc has since been contacted by companies from North America to India interested in funding the development.

The CEO told reporters at the beginning of 2013 that he expected to reach an agreement by the end of summer to sell as much as half of the shale oil project and that drilling may start by the end of the year. As much as AU$ 300 million is required to fund the exploration.

According to Bond, the company’s drilling plans are today taking priority over the negotiations. As well as the shale services company, Linc is in talks with a group of overseas energy investment companies that are potentially interested in acquiring a stake in the project, he said, without commenting further.

Chevron Corp., ConocoPhillips, BG Group Plc and Statoil ASA are among international energy majors that have made shale investments so far in Australia.

Edited from various sources by Cecilia Rehn

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