CSG can thrive in wake of plummeting oil price

[Sparty]

IBISWorld’s recent forecasts that Australia’s CSG industry is expected to boom in 2015 and will provide the benchmark for others to chase. While some industries are set for a bumper year, there are many that will face an increasingly difficult environment, with petroleum exploration likely the biggest loser in 2015 if oil prices don't improve.

According to IBISWorld, the development of export capabilities on Australia’s east coast as well as rapidly improving extraction techniques will see industry revenue grow by 148 per cent over the coming 12 months. For domestic producers, this means a rising gas price as oil remains suppressed, encouraging further investment into the market.

My view is that this shift to Asia export focus will likely see Australia's Eastern Seaboard scrounging for gas, especially as much of the exports are locked in for several years leaving little if any for local use. If our Qld. CSM wells decrease production more rapidly than expected then Australia's junior players with uncommitted reserves and resources will fire up. These include: Armour Energy (AQJ), Blue Energy (BUL), Bounty (BUY), Central (CTP), Lakes (LKO), Oil Basins (OBL). It will be interesting to see how our overseas players Sino (SEH) - China, Oil Search (OSH) -New Guinea, play into this. My hunch is that both will do extremely well going forwards. SGX listed Linc Energy (TI6) may also be on the verge of something rather amazing.