Shale gas may be sparking an energy revolution in the United States and potentially even China , but it has attracted relatively little attention in Australia. All that may have changed with a recent announcement by Brisbane-based energy explorer, Linc Energy.

Linc shares surged 24 percent after it told the Australian Securities Exchange (ASX) on January 23 that its shale oil assets in South Australia’s Arckaringa Basin had the potential to hold up to 233 billion barrels of oil equivalent (BOE) – an amount not incomparable to Saudi Arabia’s estimated oil reserves of 263 billion BOE.

The announcement sparked excitable headlines too, including the Advertiser’s AUD “$20 trillion shale oil find surrounding Coober Pedy ‘can fuel Australia’”.

Linc’s chief executive Peter Bond, a self-made mining magnate and among Australia’s richest executives, showed little reluctance to fuel media speculation.

“If it comes in the way the reports are suggesting, it could well and truly bring Australia back to [oil] self-sufficiency,” Bond told the Adelaide daily.

He said the discovery could potentially rival the U.S. shale boom, even at the lower end of estimates amounting to 3.5 billion BOE.

"The opportunity of turning this into the next shale boom is very real,” he said. “If the Arckaringa plays out the way we hope it will, and the way our independent reports have shown, it's one of the key prospective territories in the world at the moment." 

South Australia’s minerals minister, Tom Koutsantonis was also keen to promote the find, saying “shale gas and shale oil will be a key part to securing Australia’s energy security now and into the future.”

Linc released two independent reports from consulting firms DeGolyer and MacNaughton (D&M) and Gustavson Associates, with the latter estimating “unrisked prospective resources” for unconventional reservoirs of 233 billion BOE. D&M, which used a different methodology, estimated 103 billion BOE across Linc’s 16 million contiguous acres.

The Australian company, which also has oil and gas interests in the United States, said the estimates “compare favorably to prolific U.S. unconventional liquids plays such as the Bakken and Eagle Ford.”

Linc said it had appointed Barclays Bank to advise it on strategic options, including the “introduction of an experienced shale operator to joint venture the development of this emerging world-class shale play,” which is expected to cost AUD$300 million to develop.

However, analysts were less bullish, noting that the Arckaringa Basin lacked the infrastructure and production track record of the Cooper Basin to the east.

Linc shares dropped 10 percent the day after the announcement, with Bond distancing himself from the U.S. $20 trillion resource estimate and investors taking profits given the time frame and cost of development.

Krista Walter, senior energy, oil and gas analyst at RBS Morgans, told The Diplomat there was a long way to go before Linc’s shale dream became reality, given a typical recovery rate of just 5 percent.

“It’s certainly a big number, although we have known the Arckaringa Basin is prospective for both conventional and unconventional oil and gas, without having any real data on the potential size of it,” Walter said.

“It’s a prospective resource so there’s still a lot of work to be done before you can understand how much can be produced commercially.”

Rich in coal and gas, Australia is forecast by BP to overtake Qatar as the world’s largest supplier of liquefied natural gas by 2018. However, a U.S.-style shale revolution is still a distant prospect, according to Walter.

“We’re at the early stages of looking at these unconventional shales and deep coals and tight sands in Australia,” she said.

“It’s probably too early to say if it will mimic the U.S., but it’s looking promising as companies are getting gas to surface from these wells.”

However, Linc’s report was castigated by the Australian Financial Review’s Tony Boyd as “an over-the-top ASX announcement that suited a gullible media” and squeezed out short sellers in the stock.  

He noted the company’s previous reported AUD$1.5 billion sale of its coal tenements to Chinese investors, a deal which moved its share price but ultimately failed to eventuate.

But while Linc and its founder may be known for bullish statements, the report has awoken Australians to the potential of another “unconventional” resource in an energy-hungry region.

Just a few short years ago, critics panned the prospects of unconventional coal seam gas or coal bed methane, which have now become a AUD$50 billion industry in Queensland state.