Investorideas.com - Investing in the Paris Basin Shale Oil Play
Keith Schaefer, Editor, Oil & Gas Investments Bulletin
September 22, 2010
Category: Investment, Oil, Gas, Energy
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10x Bigger than the Bakken
(Investorideas.com energy newswire) The Paris Basin shale oil play in France has the potential to be ten times the size of the Bakken play in North America, and some high profile exploration is beginning soon.
Estimates range from just a few to many tens of billions of barrels of oil in the Paris Basin. Much like the North American shale plays, these formations have been drilled through many times – there are over 1000 wells drilled into the Basin – so exploration risk is low. It's completion risk – how to best unlock the oil from the rock – that is the main risk.
So there is a lot of data, which makes exploration much less risky. It also means that local residents are used to having oil wells drilled in the region – unlike New York State ;).
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Activity by explorers in this part of France has been growing, and is now hitting a fever pitch. A huge land race is underway, with applications for more than 1.6 million acres pending approval for several companies, including Toreador Resources (TRGL-NASD) in the US, Vermillion Energy (VET.UN-TSX) and Realm Energy (RLM-TSXv) in Canada.
Exploration – real drilling – in the Paris Basin will ramp up this fall. Toreador Resources Corporation is the purest play. In May they announced an exploration deal with Hess Corporation (HES-NYSE) that could be worth as much as $265 million for 50% of Toreador's 600,000 acres in the play. They spud their first well into the play in Q4 2010. It will be one of the most watched wells in the world.
Canada's Vermilion Energy has also acquired acreage in the play and begun exploration activities. Vermilion is already recognized as France's largest oil producer.
Craig Steinke, Executive Chairman for Realm Energy, says "The Paris Basin is arguably the most exciting shale play in Europe right now. We expect to acquire a good-sized position in this play."
As I wrote about earlier, many of the European shale gas plays are being bought up by the majors, there are intermediate and junior producers in the game, which should keep news flow on the play steady for retail investors.
When this happened in North America, there was huge wealth creation as the juniors and intermediates were small enough that their stocks could benefit from a productive land position.
Like the big North American shale oil plays that enriched investors, the Paris Basin has big reserve potential, good existing well data, and a local population that's familiar with drilling.
Hopefully, history will repeat itself.
*Keith Schaefer owns Toreador
About Oil & Gas Investments Bulletin
Keith Schaefer, Editor and Publisher of Oil & Gas Investments Bulletin, writes on oil and natural gas markets - and stocks - in a simple, easy to read manner. He uses research reports and trade magazines, interviews industry experts and executives to identify trends in the oil and gas industry - and writes about them in a public blog. He then finds investments that make money based on that information. Company information is shared only with Oil & Gas Investments subscribers in the Bulletin - they see what he's buying, when he buys it, and why.
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Legal Disclaimer: Under no circumstances should any Oil and Gas Investments Bulletin material be construed as an offering of securities or investment advice. Readers should consult with his/her professional investment advisor regarding investments in securities referred to herein. It is our opinion that junior public oil and gas companies should be evaluated as speculative investments. The companies on which we focus are typically smaller, early stage, oil and gas producers. Such companies by nature carry a high level of risk. Keith Schaefer is not a registered investment dealer or advisor. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer to buy or sell the securities mentioned, or the giving of investment advice. Oil and Gas Investments is a commercial enterprise whose revenue is solely derived from subscription fees. It has been designed to serve as a research portal for subscribers, who must rely on themselves or their investment advisors in determining the suitability of any investment decisions they wish to make. Keith Schaefer does not receive fees directly or indirectly in connection with any comments or opinions expressed in his reports. He bases his investment decisions based on his research, and will state in each instance the shares held by him in each company. The copyright in all material on this site is held or used by permission by us. The contents of this site are provided for informational purposes only and may not, in any form or by any means, be copied or reproduced, summarized, distributed, modified, transmitted, revised or commercially exploited without our prior written permission.
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