Xtract Energy has announced that Global Oil Shale (GOS) Group has agreed to develop its oil shale play at Julia Creek in Queensland, Australia.
As per the deal, GOS will earn a controlling interest in the Julia Creek tenements, which cover an area of 709km², by funding and delivering a three-year work programme there.
The work will include exploration, development and engineering activities at the field, which has a JORC-indicated and measured resource of 2.18 billion barrels of oil at 61 barrels per tonne, as well as other minerals.
Both parties expect that preparation of a detailed work programme and discussions leading to binding agreements will be completed within three months, when exclusivity arrangements will be in place.
Xtract Energy CEO Peter Moir said the challenge for the exploitation of Julia Creek is one of economic resources, technology,know-how and access to significant capital.
"The study work that we commissioned Worley Parsons to undertake guided Xtract towards selection of the most suitable extraction methodologies and to recommend options that might allow value to be realised from the Julia Creek asset," he added.
"The Worley Parsons report noted that the Galoter-type retorting process, which has been developed over many years in Estonia and Russia, probably offers the best solution. The Galoter process has been undergoing further development in recent years and is the world's most-used oil shale processing system."
Global Oil Shale Group executive chairman Petri Karjalainen said Xtract's oil shale tenements in Julia Creek, with approximately two billion barrels of shale oil resources, provide the company with a large-scale and potentially long-term opportunity for oil shale processing.
"GOS appreciates the opportunity and we are looking forward to co-operation with Xtract over the coming months as we develop our plans and testing for oil production at Julia Creek," he added.
"Furthermore, GOS is currently developing its environmentally friendly oil shale beneficiation process, which will be included in a testing program for ongoing upgrading the oil yield in the Julia Creek oil shales."
Image: Global Oil Shale Group will undertake a three-year work programme at the Julia Creek oil shale play owned by Xtract Energy.
Photo: Xtract Energy.