Statoil, Petrofrontier to Explore for Shale Gas in Australia

Statoil and Petrofrontier will together explore for shale gas in the South Georgina Basin in Australia's Northern Territories.

The Norwegian firm has farmed into Petrofrontier's four existing Exploration Permits (EP 103, 104, 127 and 128) as well as pending exploration permits (213 and 252). The exploration area spans over 13 million acres.

Through a step-wise exploration programme the partners will potentially drill 10-20 wells by 2017 in three phases to demonstrate prospectivity.

Canada based Petrofrontier will operate the first phase of the programme while Statoil has secured options to operate from the second exploration phase in addition to increase ownership interests from 25 to 65% of Petrofrontier's interests.

Statoil has committed to contribute $25 million for the first phase of the exploration programme. This figure could escalate to $200 million through a phase two and three depending on exploration results.

"These exploration activities are in line with our objective to access shale plays at an early exploration stage, at low cost and develop them into potentially high value assets," senior vice president for New Ventures in Statoil, Atle Rettedal said.