Cooper Basin oil and gas companies have allegedly lost an average of 70 per cent market share during the global oil price rout, an analysis from EnergyQuest states.
The report said the significant impact of the lower oil price has increased the likelihood of the Cooper Basin becoming the “hotbed”? for future mergers and acquisitions.
EnergyQuest chief executive, Graeme Bethune said the global oil supply growth being brought on by OPEC countries decision not to taper production during the lower price was exacerbating the situation.
“The further fall in oil prices in recent months has added insult to injury for the share price values of Australia’s listed companies,”? he said.
Citing a study of Australian oil and gas company stocks, Dr Bethune said that AGL was the only Australian-listed firm to escape significant impact of the global glut, while all others were worse off.
“The biggest falls have been for Cooper Basin players, averaging a 70 per cent downturn in the value of their shares and raising the likelihood of consolidation.”?
Meanwhile, oil production in the Cooper continues to perform well, reaching 12.6 million barrels in 2014/15.
“Moreover, as a supplier of east coast gas, the Cooper Basin is supplying of the few tight gas markets in the whole world with increasing prices,”? he said.
Demand paired with the production growth in the Cooper Basin presents it as a potentially fertile ground for M&As.
EnergyQuest also noted that with production in the Cooper poised to increase, royalties for the Queensland government are set to rise from $51 million in 2014/15 to more than $518 million in 2018/19.
“Without LNG development, Queensland would have had $500 million per annum less to spend on health, education and other vital services,”? Dr Bethune said.