International players, predominantly from the US, have increasingly focused on the Australian oil and gas industry over the last few years, looking to capitalise on the available acreage and the relative ease of raising funds.
Factors contributing to Australia being in favour include the comparative size of resources pools in key areas in the US, continuing Middle East instability, the comparative absence of sovereign risk in Australia, a bullish market and record oil prices.
In South Australia, a steady wave of foreign investment has flowed into the Cooper Basin region and other resources fields within the state. For instance, the ASX listing of Sundance Energy Australia Limited in 2005 saw US-based promoters invest in acreage in the South Australian sector of the Cooper Basin, adding diversity to its US asset base. The IPO was voted one of the top ten floats of 2005 by The Australian Financial Review.
Many companies have realised the benefits of diversifying tenement portfolios. The mix of 'higher risk/higher return' plays in relatively unexplored or under-developed Australian tenements, and the lower risk (and potentially lower returns) of established US fields, has proved an attractive investment opportunity, judging by the success of the Sundance Energy IPO. Companies such as Tomahawk Energy, on the other hand, have raised capital in Australia's buoyant market to support investment in operations elsewhere, such as the USA.
The wave of investment in Australian tenements is not limited to US companies, nor is it restricted just to oil and gas plays. China, India and South Africa are investing in Australian oil and gas ventures, as well as in traditional hard rock mining, which in turn is creating exciting reciprocal opportunities for Australian companies in those countries.
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