Santos tips 30% rise in Cooper Basin gas output
The forecast by the company, which has a major position in the Cooper Basin, comes as gas producers are warning of significant rises in gas prices over the next three years amid rising competition from export projects being developed in Queensland.
Santos said capacity at its operations in the Cooper Basin had risen for the past three years after bottoming at about 400 million cubic feet a day. At the same time, oil production has risen to three-year highs.
Gas production capacity is now likely to rise 30 per cent to about 550 million cubic feet a day by 2015, Santos told a conference in Brisbane on Tuesday.
Demand is rising for gas from the export projects being developed in Queensland and as Santos and its partners prepare to access a greater portion of so-called unconventional gas, which in the Cooper Basin will be sourced from shale.
Santos has had strong initial flows from unconventional gas wells in the region.
The company is also working to reduce "down time" when its wells are not producing, as well as working to cut production costs to below $10 a barrel of oil equivalent. It is also aiming to more than double the wells drilled annually in the Cooper from the present level of about 25.
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Santos has forecast a 30% rise in gas production capacity in the Cooper Basin over the next two years, taking capacity to about 550 million cubic feet a day by 2015 from recent levels after it had bottomed near 400 million cubic feet a day.
Santos says the additional supply will come in part from accessing more unconventional gas — specifically shale — in the Cooper Basin. The company has reported strong initial flows from unconventional gas wells in the region.
Capacity in the Cooper Basin has been rising for the past three years after a low point around 400 million cubic feet a day, and Santos reports oil production in the basin has climbed to three‑year highs.
Santos is working to reduce 'down time' when wells are not producing, cut production costs to below $10 a barrel of oil equivalent, and increase annual drilling activity in the Cooper Basin.
Santos is aiming to more than double the number of wells it drills each year in the Cooper Basin from the present level of about 25 wells annually.
Gas producers, including Santos, have warned of significant rises in gas prices over the next three years as demand increases — driven largely by export projects being developed in Queensland that will compete for Australia's gas supply.
In the context of Santos’s plans, 'unconventional gas' refers to gas sourced from shale formations in the Cooper Basin. Santos says it and its partners are preparing to access a greater portion of this unconventional resource.
Investors should note the company’s public plans and operational updates: a forecast 30% rise in Cooper Basin gas capacity to about 550 million cubic feet a day by 2015, strong early flows from unconventional (shale) wells, efforts to cut production costs to under $10 per barrel of oil equivalent, and an aim to more than double annual well drilling from roughly 25 wells today.
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