Australis Oil & Gas Ltd. is a listed company which was formed in 2014 and listed in 2016. The company is the sole owner of the largest delineated, appraised but undeveloped unconventional oil development in the USA.
Australis was formed by the founders and management team of Aurora Oil & Gas Limited (Aurora), an oil and gas company focused on unconventional onshore oil & gas exploration, development and production in the USA. Aurora went public with an initial market cap of ~A$30 million and was sold in June 2014 for a value of A$2.6 billion, with market cap at the time of A$1.8 billion.
The management team at Australis learnt a huge amount from their time in Aurora Oil & Gas and spent time looking for the right opportunity which they acquired for a low price in 2014. Now the company plans to ride the cycle and they have recently raised A$10 million earlier this month which suggests that the market is recovering and the oil industry is generating interest. The management team has put in A$11-12 million of their own money and holds 10% of the company in equity.
Australis has accumulated a large strategic position in the USA, becoming the largest acreage holder in the production-defined core area of the Tuscaloosa Marine Shale (TMS). The company sits on over 170 million barrels of oil which is recoverable, in the ground, awaiting development as a mid case estimate. Australis operates 38 wells in the TMS core with non-operated interests in a further 17 wells.
Australis Oil & Gas is looking for strategic partners going forward to invest in their asset which has solid returns and proven economics. Capital is incremental in this business as money can be raised during the programme which gives flexibility to deployment of capital which is attractive to potential investors as it gives them the ability to control their capital spend profile. The entry cost doesn’t necessarily need to be high and strategic partners could be a range of types and sizes and the company is currently in discussions with potential investors.
The oil market in the US is showing recovery as demand post-Covid is anticipated to increase and the price of oil has changed over the past few months to reflect this. The market sentiment in the US is changing which is what Australis Oil & Gas has been waiting for to achieve the strategic objectives for their company going forward.
Company Page: https://www.australisoil.com
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