Statoil said it farmed into four existing permits for the development of the South Georgina basin in Northern Territories of Australia with Toronto-listed exploration company PetroFrontier Corp.
"This is an early entry at scale into over 13 million acres of immature, but potentially highly prospective play at low cost, with high risk but also with significant upsides," said Statoil. "Through a step-wise exploration program the partners will potentially drill 10-20 wells by 2017 in three phases to demonstrate prospectivity."
The Norwegian company said it would contribute $25 million for the first phase of development and could raise that level to $200 million in later phases, depending on exploration results.
Statoil said the move is in line with its objective to access shale plays.
"We believe that partnering with a global leader like Statoil validates the potential of our assets and the exploration work we have completed to date," added PetroFrontier Chief Executive Officer Paul Bennett.
The Australian government says shale natural gas resources are estimated at around 400 trillion cubic feet. The country is the No. 4 liquefied natural gas exporter in the world.