When Drillsearch (ASX: DLS) Managing Director Brad Lingo changed his ringtone to AC/DC’s ‘Back in Black’ last week to symbolise the oil producer’s record $45 million net profit, he could have just as easily been making a statement about the changing fortunes for oil production across the wider Cooper Basin where his company operates.
Once considered a mature region for oil and gas discoveries, the Cooper Basin, through a combination of new technology and small, adaptable companies, has been rejuvenated as a valuable long-term energy asset.
Several companies are making big inroads in exploration and production growth in the region, including energy major Santos (ASX: STO) and Beach Energy (ASX: BPT). The combined interest and investment in the Cooper Basin has resulted in a huge upswing in production to the highest levels in 20 years.
According to a presentation by Senex Energy (ASX: SXY), oil production from the Cooper Basin has rocketed from around 6 million barrels (mmbbls) in 2011 to almost 12 million in 2013. This has been achieved through record production from companies like Senex, which increased production by 108%, and Drillsearch, which grew production 173%.
The growth looks set to continue as bigger investment fish start to circle. In February, Beach Energy announced it will be partnering with energy giant Chevron to invest up to US$349 million in exploration for shale gas in the Cooper Basin.
The growth is being facilitated by a new wave of exploration using 3D seismic technology to capture imagining of potential pockets of oil and gas. These images are then analysed and can identify where wells should be drilled to a high level of accuracy. This reduces the risk of drilling dry wells and maximizing investment returns.
Given the huge amount of acreage on offer in the Cooper Basin, the successes to date and the amount of money being poured in to further exploration, this could be just the start for operators in the region.
As the great mining boom wanes many investors are on the move looking for Australia’s the next big growth opportunity. With rapidly growing production and high investment, a growing number of arguments point towards the Cooper Basin.
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Motley Fool contributor Regan Pearson owns shares in Senex Energy.