Australis Gets Rig for US TMS Play

Australia-listed Australis Oil & Gas has secured a rig contract for the drilling of its Tuscaloosa Marine Shale (TMS) acreage position in Mississippi and Louisiana in the US and aims for its operations to begin in September, the company said August 31.

“A rig contract has been executed with Nabors Drilling for a minimum six well commitment and with the provision to extend after this initial program. The rig has been active in the Haynesville shale, working for a major international oil and gas company,” Australis said.

“Australis has been advised that it is expected to be released before the end of September 2018 and the Company will make a further announcement once confirmed,” it added.

RBC Capital Markets analyst Ben Wilson said it is a good result for Australis.

“We think that Australis has done well to contract this rig, as the market for high/super-spec rigs is tight in the US, driven by continuing rig additions in the Permian and other basins,” he said.

“Australis is a virtual pure play on the US Tuscaloosa Marine Shale in Louisiana and Mississippi.  The Tuscaloosa Marine Shale is an unloved and, in our opinion, under-appreciated US conventional oil play. Interest in the region has increased, with ConocoPhillips, Marathon, and EOG Resources all acquiring nearby acreage in central Louisiana targeting the Austin Chalk play,” he added.

He said that RBC expects to see first rates from the operation in February or March next year.