The Beetaloo Sub-Basin is about 500 km southeast of Darwin in Australia’s Northern Territory. It is a part of the very old Proterozoic-aged McArthur Basin, which began to fill with sediment 1.8 billion years ago. It covers a large area of about 28,000 square km. Parts of the sub-basin are filled with up to 7000 m (about 21,000 ft) of sediment. Exploration in the sub-basin began in 1984 and was revived in 2015 when Origin Energy drilled a few vertical wells and one horizontal well. The sub-basin is prospective for unconventional oil and gas in the form of shale gas, tight gas, and shale oil. The main prospective target in the Beetaloo is the Mid Velkerri B Shale, gas-rich rocks about 2,000-2,500 meters below the surface. This emerging shale play has long been compared to the prolific Marcellus Shale play in the Eastern U.S. Since Australia already exports a large volume of its natural gas, the play is expected to be mainly a play for export. It could also supply demand on the East Coast due to the depleting fields currently supplying it. It has been said that this play alone could supply the country with natural gas for about 400 years. As a Mesoproterozoic play with 1.4 billion-year-old source rocks, the Beetaloo Sub-basin play is one of the oldest petroleum systems in the world, though not as old as some in Siberia.
Beetaloo Sub-Basin Geology
According to the 2020 Geoscience
Australia Beetaloo assessment:
“Organic-rich shales of the Velkerri Formation in the
Urapunga region returned Re-Os dates of 1361±21 Ma and 1417±29 Ma (Kendall et
al., 2009). These currently constrain the depositional ages of the Amungee
Member C and A organofacies of the Velkerri Formation (Munson and Revie, 2018).”
“The Velkerri Formation is the primary source facies in
the region and it has been the subject of considerable hydrocarbon resource
assessments (Close et al., 2016; Revie, 2017a, 2017b; Weatherford Laboratories,
2017) and it is presently the target for stimulated gas production testing
(Close et al., 2017). Further information is provided in the petroleum
prospectivity appendix (Hall et al., 2020).”
A 2021 paper in the
Australasian Exploration and Geoscience Conference proceedings explores the
Beetaloo Sub-basin petroleum system, where Middle Velkerri and Lower Kyalla
shales are the main unconventional source-rock-reservoir targets.
“The sedimentary sequence was subjected to multiple
burial and uplift events including in the Mesoproterozoic, Neoproterozoic,
Palaeozoic and the Mesozoic. Thermal maturity modelling suggests
that maximum burial of the Precambrian section occurred during the Palaeozoic.”
“…liquid hydrocarbon generation from the Velkerri shale
began during the Mesoproterozoic further generation and secondary cracking to
gas occurring during the Neoproterozoic and Palaeozoic burial
episodes. In the shallower regions of the basin, where the Velkerri
and Kyalla shales are liquids and wet gas mature, hydrocarbon generation mostly
occurred during the Palaeozoic. The properties of reservoir
hydrocarbons predicted by the model is consistent with the data from production
wells testing the Middle Velkerri and Lower Kyalla shales in different parts of
the basin.”
“As the basin experienced multiple burial and uplift
episodes the timing of hydrocarbon generation is a critical factor controlling
accumulation, preservation and secondary alteration of hydrocarbons within the
source rocks and conventional reservoirs. Thermal maturity profiles
for the wells suggest that maximum thermal maturation of the preserved
pre-Cambrian sequence was achieved during the Palaeozoic, which is consistent
with previous modelling studies for the Beetaloo Sub-basin and adjacent basins
in the Northern Territory.”
Generally, the dry gas
generation window is in the deeper parts of the sub-basin, and liquids and wet
gas generation windows are in the shallower parts of the sub-basin.
Below are maps and sections from the 2020 Geoscience Australia Beetaloo assessment, including structural geology, stratigraphic sections, seismic sections, and thickness maps.
The following sections and maps are from the 2021 Australasian Exploration and Gescience Conference. They include a basin model, information about adsorbed gas (Marcellus has high adsorbed gas amounts as well), a vitrinite reflectance map, a strat section with wells and reservoir targets, and a depth-to-reservoir map.
The in-place gas reserves of
the Beetaloo Sub-Basin are estimated to be about 500TCF. That is quite a lot of
gas. Recoverable reserves are estimated to be at least 100TCF, and my guess is
that estimate may grow in the future.
Below is a Beetaloo well
schematic and a stratigraphic section from a 2021 Origin Energy well. Below
that is an abstract from a 1998 AAPG Bulletin article about the Velkerri B,
followed by a well log. The depths are shallower, so I am guessing that is a
more edge-of-basin well.
Exploration and Drilling
Early exploration began in
1984 by Amoco, and in 1985, oil was discovered by Pacific Oil and Gas sourced
from the Velkerri shale formation. However, after drilling some wells, they did
not establish commercial production and abandoned the project, no doubt
influenced by the remoteness and lack of infrastructure. According to a March
2025 Substack post by ZerogCoS:
“The real turning point came at the turn of the century
when four American geologists, working through Sweetpea Petroleum, saw
something their predecessors had missed. Drawing on their experience with U.S.
shale plays, they completed the first-ever hydraulic fracturing operation in
Australian shale through the Shenandoah #1A well in 2011. These early tests
identified the Middle Velkerri "B" shale as the primary target for
future exploration—a discovery that would later prove crucial for the basin's
development.”
Hess spent $80 million
running seismic in 2011-2012 but decided to abandon the project in 2013. Again,
it was the remoteness and the extensive infrastructure requirements that
influenced Hess’s decision to walk away.
Early modern drilling by
Origin Energy in 2015 opened the sub-basin for unconventional testing. In
February 2024, Tamboran Resources' Shenandoah South 1H well achieved a 90-day
flow rate comparable to the most productive regions of America's prolific
Marcellus Shale. Indeed, the Beetaloo shale play has been compared to the
Marcellus in several ways, which will be detailed later. However, that momentum
was blocked when the Northern Territory government imposed a moratorium on
fracking in 2016 that lasted until 2018, “requiring a comprehensive
scientific inquiry and implementation of 135 separate recommendations before
exploration could resume.” In 2022, Origin sold its Beetaloo stake to
Tamboran Resources and Bryan Sheffield. Sheffield founded Permian Basin player
Parsley Energy, which was later sold to Pioneer. He personally invested $100
million in the Beetaloo.
“Tamboran secured a strategic alliance with Helmerich
& Payne, importing one of H&P's super-spec FlexRig rigs to the Northern
Territory—the same rigs that helped drive efficiency gains in U.S. shale plays.
The impact was immediate: the Amungee NW-3H well was drilled in just 17.9 days,
a 20-day improvement over previous wells.”
“Tamboran partnered with Liberty Energy, securing the
first modern frac spreads ever deployed in Australia. This wasn't simply about
importing equipment; Liberty brought crews with extensive U.S. shale
experience, capable of executing the high-intensity completions that drove
productivity gains in plays like the Marcellus.”
The Velkerri B Shale’s
continuous, uniform, undisturbed expanse of about 5 million acres reduces the
geologic risk and makes the deposit comparable to world-class shale plays like
the Marcellus and Argentina’s Vaca Muerte in its Neuquén Basin. The Beetaloo is
also overpressured like these basins.
“Initial core samples suggest Mid-Velkerri B shale
contains low-reactivity clays and minimal carbonate content. This composition,
if proven consistent across the basin, creates advantages for hydraulic
fracturing operations, potentially allowing for more predictable responses and
maximum reservoir contact.”
“The Beetaloo's organic matter developed under unique
conditions when Earth's atmosphere contained less than 2% oxygen, potentially
reducing oxidation of organic material before burial. This may have led to
higher retention of hydrocarbons within the rock matrix – similar to how food
preserves better in low-oxygen packaging.”
“Furthermore, the geological consistency, if confirmed
across the basin, could reduce drilling risk and variability between wells,
potentially decreasing the number of underperforming wells that typically
affect portfolio returns in shale plays.”
“Recent drilling results have provided early evidence of
this potential. Tamboran's Shenandoah South 1H (SS-1H) well encountered nearly
300 feet of Mid-Velkerri B shale – reportedly the thickest section intersected
in the basin to date. The well achieved a 90-day flow rate of 2.9 MMcf/d
(million cubic feet per day) from a 1,644-foot stimulated lateral length. While
extended production testing across multiple wells is needed to confirm these
early results, initial performance suggests promising commercial potential.”
The Vaca Muerta in Argentina also
had the problem of remoteness and lack of infrastructure. This slowed its
development. They also have ongoing financing issues and some other problems
that the Beetaloo doesn’t have. Most Vaca Muerta development was reactive and
gradual. Therefore, it is thought that the Beetaloo can be developed faster
with pipelines and LNG exporting already being planned out.
“Establishing domestic frac sand mines cut costs {in the
Vaca Muerta} by $1-2 million per well—a strategy Beetaloo could emulate.”
Tamboran has a three-phase development plan to commercialize the Beetaloo. Phase One is continuing the current pilot project with first gas sales estimated for early 2026. A potential $5 billion data center development plan for the Northern Territory is being explored to run on local natural gas, up to 100MMCF/day, which should be quite doable after wells are drilled. Phase One is dependent on sustained gas flows, mitigating any technical issues with wells, and regulatory expediency in advancing pipelines and processing facilities. Modular processing facilities are being planned.
Phase Two involves building a pipeline to Australia’s East
Coast, where there is demand for natural gas. The timeline for Phase Two is
2027-2030. They also plan to decrease well costs significantly, utilizing
American Shale and Vaca Muerta innovations.
“A major component of this cost reduction strategy is
the domestication of sand supply, projected to reduce costs from $26 million to
$19 million per well. Additional savings will come through doubling stage
completion speeds and implementing multi-well pad development, leveraging
economies of scale.”
The goal of Phase Two is to bring up to 1BCF/day to the
East Coast. Other gas fields serving the region are experiencing significant
production decline, so the Beetaloo gas is likely to be needed. Indeed, it is
rather unusual that Australia has gas shortages on the East Coast while the
country as a whole exports the vast majority of its gas resources from other
parts of the country. Phase Three plans to bring 2BCF/day of LNG to market in
2030. Tamboran has secured a 420-acre site in Darwin's Middle Arm precinct for
a proposed 6.6 MTPA LNG facility, with non-binding memoranda of understanding
already in place with BP and Shell for 20-year purchase agreements. Tamboran’s
Three-Phase approach has many advantages. There are few players in the basin,
so they can control production and timelines without much competition,
utilizing the lessons learned in the U.S. and Argentina. As shown below, the
Darwin location for LNG export has some very significant advantages for getting
LNG to major demand centers in Asia.
An October 2025 article in
Rig Zone summarizes Tamboran’s drilling pilot project:
"The program included the batch drilling of the
Shenandoah South -4H (SS-4H), -5H and -6H wells, each successfully completed
with a target lateral length of 10,000 feet", it said in a stock filing.
"The three wells have been successfully cased and suspended ahead of
stimulation activities.”
"The average spud-to-TD (total depth) across the
program was 26.7 days, with the drilling and casing time delivered within the
35-day forecast.”
"The program saw an increase in efficiency driven
by the application of new Baker Hughes (NASDAQ: BKR) anti-vibration drilling
technology. This resulted in Tamboran drilling its fastest horizontal section
in the Mid Velkerri B Shale to date in the SS-6H well, reaching over 1,100
meters (3,603 feet) in a day.’
"Tamboran plans to complete the SS-4H well in 4Q
2025. The program includes up to 60 stages across the full 10,000-foot
horizontal section within the Mid Velkerri B Shale using the imported Liberty
Energy (NYSE: LBRT) modern stimulation equipment. The SS-4H well is planned to
be flow-tested for 30 days ahead of being shut-in for future gas sales"
“Tamboran expects to stimulate all three wells, plus the
SS-3H well, by the first half of 2026.”
“Last month Tamboran said it had received approval from
the Northern Territory government to sell appraisal gas from the SS Pilot
Project, after the Beetaloo JV and the government entered an agreement for the
supply of 40 terajoules (tJ) per day from the project to the Northern Territory
for an initial term of nine years starting in the first half of 2026.”
Thus far, it seems that
Tamboran’s drilling program is proceeding nicely, utilizing American shale
innovations to optimize production and project economics.
Both Tamboran and another
major player, Beetaloo Energy Australia (BTL), are awaiting production
verification via IP 30 and IP 90, or 30-day and 90-day rates. Beetaloo Energy
Australia is currently waiting for an IP 30 assessment on its recently
completed C-5H well in its Carpentaria Project, which they are also targeting
for first production in 2026. Thus, the Beetaloo is still in the de-risking
phase, but results seem to be even better than initial expectations so far, which
bodes well for accelerated development. The map below is from BTL’s latest
investor presentation and shows all three players currently drilling or
planning to drill through the Western Beetaloo Sub-Basin. Tamboran has two
projects in progress, BTL has one, and Santos has one planned for 2026. The
areas being tested are all around the sub-basin.
Interestingly, BTL also notes on its investor presentation that its gas from the Carpentaria Project, which is on the eastern edge of the sub-basin, is very high in ethane. While in other areas this could be considered a problem since too much ethane makes the gas too reactive for things like home heating, here it may offer a solution by selling the ethane to enrich Darwin LNG, which is switching sources from a high-ethane source to a lower-ethane source. Its gas is quite high in ethane at 12.2% and also low CO2 at less than 1%. Ethane could also support an ethane cracker if that may one day be considered.
An article in Research as a Service suggests that there are ample opportunities for partnering and investing in these projects. They also note that BTL could be an acquisition target for bigger oil & gas players.
Well Parameters and Noted Similarity of Velkerri B Shale
Play to the Marcellus Shale Play
Characteristics such as high
organic matter content, or high TOC, thermal maturity (large dry gas fairway),
and silica content (which aids brittleness) make the Velkerri B shale favorably
comparable to the prolific Marcellus shale play in the U.S., the largest gas
field in the country, as Penn State’s Dr. Terry Engelder notes below.
“Dr. Terry Engelder, Professor Emeritus of Geosciences
at Penn State University and an early pioneer in Marcellus Shale assessment,
notes: "The geological similarities between the Mid Velkerri B Shale and
the Marcellus are striking, particularly in terms of organic content, thermal
maturity, and brittleness—key factors that determine a formation's response to
hydraulic stimulation."
Below are more comparisons of the two plays in terms of
well parameters, along with some data on Tamboran’s wells. These similarities
may allow the operators in the play to “leapfrog” into a development phase for
drilling much sooner than otherwise would be the case. Tamboran already plans
to drill 10,000 ft laterals soon. Applying similar high-intensity completion
designs for Beetaloo wells is already proving effective. Both of these
innovations are expected to optimize production and cost-effectiveness. Lessons
learned should allow the operators to optimize just as is done in mature basins
in the U.S.
Tamboran's SS-2H-ST1 Well
Comparisons of Velkerri B and Marcellus
The following comparisons are from John Vadeh for Discovery Alert.
Going forward, some of the
technical and operational challenges to be overcome also run along the same
lines that mature U.S. fields have dealt with, such as well-spacing and
decline-rate management. Other challenges, like water management and
remoteness, are more region-specific.
Environmental and Climate Concerns, Opposition, and
Indigenous Land Use Agreements
Perhaps these above-mentioned concerns are the elephant in the room. Indigenous people make up nearly a quarter of the Northern Territory’s population, and their rights and concerns must be considered. As noted, Australia was under a fracking ban from 2016 to 2018, and there is much opposition on environmental and climate grounds. However, the potential of Beetaloo LNG to replace coal in Asia is also very significant as a relative decarbonization engine. Activists refer to the Beetaloo, and any other big new gas or oil development in the world, for that matter, as a climate bomb. The Institute for Energy Economics and Financial Analysis (IEEFA) put out a report in March 2024 calling the Beetaloo Play a $10 billion pipe dream. Despite its name, IEEFA is a biased anti-fossil fuel organization, as I noted in its biased blue hydrogen evaluation and as can be gleaned from its website. Its Beetaloo report emphasizes the high risk due to costs and infrastructure requirements. What they don’t realize is that if the volumes of producible gas are fully demonstrated, as is expected, those costs can be overcome. They also note the absence of big players in the basin. However, the reserves alone would likely make some of those big companies quite interested in buying out the smaller ones to monetize the vast resource.
One of
the IEEFA paper’s authors, Kevin Morrison, notes:
“The remoteness of the Beetaloo means that significant
new infrastructure investment will be required to process gas and transport it
to end users, particularly along Australia’s east coast,” says the report’s
author Kevin Morrison, IEEFA’s Energy Finance Analyst, Australian Gas.”
“The NTLNG project alone will require an investment
likely exceeding US$10 billion, given the high costs associated with greenfield
LNG projects. Our analysis suggests that these projects may have low economic
value, with high costs and risks, and uncertain returns.”
“Beetaloo gas is unlikely to be competitive,” Mr
Morrison says. “The unprecedented increase in LNG supply under construction
means that global markets are likely to face a glut in the second half of this
decade. Australia’s relatively high LNG costs will likely make it uncompetitive
with lower-cost Qatar and the US, which are driving new capacity additions.”
“There is also great uncertainty about the long-term
demand outlook for LNG in emerging Asian markets, which are expected to replace
Australia’s main markets for LNG exports.”
He also cites some struggling
Australian LNG projects, which have faced high costs and limited profits with
cost overruns and construction delays. He cites Tamboran, which has spent $300
million over the past six years (now seven), without producing any commercial
quantities of gas. However, that is expected to change in a matter of months.
There are some concerns about
important groundwater aquifers in the Northern Territory, but it seems likely
to me that modern shale players can mitigate those problems satisfactorily,
especially with seasoned U.S. players involved.
An October 2023 article in
The Conversation disputes a CSIRO assessment that the Beetaloo can be developed
without adding too much emissions, citing the usual culprits: flaring, fugitive
methane, LNG emissions, and blue hydrogen emissions, all of which are likely to
be overblown and relying on data that is too old since modern methods have
allowed well operators to limit those losses considerably.
Tamboran and the other
players in the region are consulting with Indigenous Land Councils to make
comprehensive land use agreements.
Some regulatory and
environmental challenges are listed below. Water management is going to be
important and is expected to be done carefully. Robust methane emissions
monitoring is expected. The regulatory approval process, which takes about
12-18 months, could slow things down but is expected to be mitigatable.
Tamboran has indicated they are willing to go beyond requirements and implement
best practices for water management, methane emissions, aquifer protection, and
other environmental concerns.
Infrastructure Needs Are Clear Due to Gas Shortages
A recent article in the Financial Review notes that the Northern Territory government has given loan guarantees to Tamboran and made commitments to buy gas, including initial gas from the pilot project. Other investors and partners are involved as well. The gas shortage along the East Coast is bad enough that there are plans to build a facility to import LNG in the region. That bodes well for a large pipeline to be built from the Beetaloo, which would mean cheaper gas with less associated emissions than imported LNG.
Currently, a 37 km pipeline is being built from
the field to an existing line to supply the Northern Territory (NT). Sales are
expected in the second half of 2026. The NT region has been experiencing gas
shortages as well due to flow problems at Eni’s offshore field. They have had
to divert gas from LNG export terminals to domestic supply.
“We need gas generation to keep the electricity grid
stable, and without new sources of gas, Territorians would be exposed to higher
prices and costly emergency supply arrangements,” Acting Chief Minister Gerard
Maley said.
Pipelines from the Beetaloo
to both markets are clearly needed and will supply inexpensive power. These
projects are in the public interest despite any environmental risks. It can be
argued that Beetaloo gas will provide national energy security. Discovery Alert
notes that Beetaloo gas is expected to provide 20% of East Coast gas by 2030,
when the pipeline is in service. Shortages are expected by 2027, so they may
have to import and divert in the interim. Current gas prices on Australia’s
East Coast are 30-50% higher than U.S. Henry Hub prices. This makes the market
economically attractive to Beetaloo producers and infrastructure partners to
pay off their initial investments, and a likelihood that those prices will drop
for consumers as more gas is delivered. There is also considerable industrial
demand for natural gas in the region.
Some infrastructure plans are
shown below, from Discovery Alert.
Below is a map showing the clear location advantages for the Northern Territory supplying LNG to Asia, to areas hosting 56% of the global population.
Economic Benefits
This major natural gas play
project is expected to bring economic benefits all along the value chain. This
includes job creation, tax revenue, infrastructure buildout, energy security,
and manufacturing support, as shown below, from Discovery Alert.
The bottom line is that the
Beetaloo seems to have a bright future and offers inexpensive natural gas to
markets where it is needed now and in the short term, as well as in the longer
term in the form of Asian LNG. If operators do things right, it should be a
major economic boon to the region and the country.
References:
Beetaloo
Energy Reports Progress in Beetaloo Basin. TipRanks Auto-Generated Newsdesk. Last
Updated: September 12, 2025. Beetaloo Energy Reports Progress in
Beetaloo Basin
Beetaloo
Sub-basin. Northern Territory Gas. Beetaloo Sub-basin | Territory Gas
Beetaloo
Partners Complete Drilling Program for Pilot Gas Project. Jov Onsat, Rigzone
Staff. October 15, 2025. Beetaloo Partners Complete Drilling
Program for Pilot Gas Project | Rigzone
Beetaloo
gas to hit market in 2026, thanks to $75m NT guarantee. Angela Macdonald-Smith.
Financial Review. September 30, 2025. Beetaloo Basin gas to hit market in
2026 thanks to $75m Northern Territory guarantee
Tamboran
Resources Unlocks Beetaloo Basin Gas Potential with Record-Breaking Discovery. John
Zadeh. Discovery Alert. June 16, 2025. Tamboran Leads Beetaloo Basin Gas
Revolution: Record Flows
Beetaloo
Energy Australia: Update Report: Derisking the ‘next big (gas) thing’ is well
underway. Research as a Service. October 13, 2025. RaaS Advisory template
Beetaloo
a $10bn pipe dream for minor gas producers as big players desert Basin. Kevin
Morrison and Josh Runclman. Institute for Energy Economics and Financial
Analysis. March 22, 2024. Beetaloo a $10bn pipe dream for minor
gas producers as big players desert Basin | IEEFA
Beetaloo.
Wikipedia. Beetaloo - Wikipedia
Geology
of the Beetaloo GBA region: Technical appendix for the Geological and
Bioregional Assessment: Stage 2. 2020. Geoscience Australia. Geology
of the Beetaloo GBA region. Technical appendix for the Geological and
Bioregional Assessment: Stage 2.
Field
Notes: Beetaloo Basin: Australia's Shale Revolution Finally Arrives? Ero GCoS. March
3, 2025. Substack. Zero GCoS | Another
oil and gas tourist | Substack
Petroleum
systems model for source-rock-reservoir evaluation in the Beetaloo Sub-basin. Australasian
Exploration and Geoscience Conference (AEGC). Brisbane 2021. ID032.pdf
Australia’s
Beetaloo shale play: Is Australia’s Beetaloo Shale Play rival to the North
American Marcellus Play? Jonathan Craig, NVentures Ltd. July 18, 2021. Australia’s
Beetaloo shale play - GeoExpro
The
Beetaloo gas field is a climate bomb. How did CSIRO modelling make it look
otherwise? Bill Hare. The Conversation. October 30, 2023. The
Beetaloo gas field is a climate bomb. How did CSIRO modelling make it look
otherwise?
Beetaloo
Energy Australia. Corporate Presentation September 2025. CORP-250902-Beetaloo-Energy-SEAAOC-presentation-pdf.pdf
Velkerri
76 S2-1. Well Completion Report (Basic). EP 76. Beetaloo Sub-basin. Northern
Territory. Origin Energy Resources Ltd. 2022. Project
Business Case - Short Form
Proterozoic
source rocks: Sedimentology and organic characteristics of the Velkerri
Formation, Northern Territory, Australia. John Keith Warren, Simon Christopher
George, Joseph Hamilton, and P. Tingate. AAPG Bulletin 82(3):442-463. March
1998. (PDF)
Proterozoic source rocks: Sedimentology and organic characteristics of the
Velkerri Formation, Northern Territory, Australia
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