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Santos Says Shale Gas Potential in Australia Is ‘Very Large’

Santos Ltd. (STO), Australia’s third- largest oil producer, said the shale gas potential in the Cooper Basin in the center of the nation is “very large.”

“We’re all conscious of what happened in North America, where the play opened up quite quickly,” David Knox, chief executive officer of the Adelaide-based energy company, said today on a conference call with reporters. “The potential is very large, but it is absolutely still a potential. We need to demonstrate that through drilling and scientific work.”

Santos drilled a vertical shale gas well in the Cooper Basin in December and plans to drill a horizontal well in the fourth quarter, the company said today in a presentation. The company plans to drill four “unconventional” wells in the area in the second half of this year, according to the document.

“It’s about using technology -- a lot of it that has been used successfully in North America -- to unlock these resources and drive down costs,” Knox told analysts earlier today after the company reported a 51 percent gain in full-year profit.

Santos rose 0.1 percent to A$13.56 at the close of trade in Sydney. The benchmark index rose 0.3 percent.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

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