A deliberate and considered business strategy
Australis employed a strategy of taking advantage of market conditions that existed in 2015 to 2017 to acquire a large ownership position within the Tuscaloosa Marine Shale (TMS), one of the last remaining emerging oil shale basins onshore in the USA. This acreage with its proven reserves and large undeveloped resources, together with our Portugal onshore license areas, provides the platform for significant value accretion with the increase in oil price since Australis's acquisitions and underlying asset quality.
Our strategy focuses on:
- managing existing TMS production to maximise field cashflows;
- extending existing and securing new leases on longer terms within the TMS core area to capture well locations and oil resources for future development; and
- execution of an initial drilling program to:
- repeat the productivity results of the last 15 wells drilled in the TMS core area in 2014 at the current cost base;
- demonstrate the well economics of the TMS Core acreage over a set of new wells
- and lift the overall value of the substantial position Australia holds within the TMS Core; -
- convert further acreage to HBP status; and
- significantly increase field cashflow
The current phase of our corporate strategy involves an initial limited drilling program aimed at demonstrating well performance and economics of the TMS by applying contemporary industry equipment, drilling and completion techniques in today's cost environment. Australis believes that this initial drilling program will generate a material re-rating of the value of our TMS asset.
Australis secured an experienced operating team to who have had the benefit of an extended period of detailed planning who have now worked through their own learning curve with some significant initial well results. Industry experience in shale plays is overwhelmingly that repetition drives drilling and completion efficiencies; what cannot be refined is oil productivity from the reservoir.
Australis has a proven board and management team
The board and key management are experienced and have a successful track record in acquiring, developing, managing, financing and realising value from oil and gas assets in the USA.
Primary aim of our strategy is to deliver shareholder value
Our vision is to deliver superior shareholder returns by exercising disciplined capital management during the execution of the planned business strategy.
We will achieve this aim by:
- maximising the value of our assets in the USA and Portugal; and
- retaining flexibility with respect to the financing, timing and extent of future development of each asset, achieved as a result of:
- our operator status which ensures direct control over the timing and amount of capital expenditure to be committed;
- our existing cash balances and expected cash flows from our existing oil production within the TMS; and
- our ability to leverage our unique acreage positions to consider partnership and or financing opportunities at the appropriate time