SMH Extract (Garimpeiro) - Mention of beach T/O of ADE as...

SMH Extract (Garimpeiro) - Mention of beach T/O of ADE as well

BHP Billiton is not alone in experiencing a decline in its share price in the past 12 months. Friday's closing price of $37.80 a share was down 14.6 per cent from a year ago.

There are many reasons for the decline, most of which are shared by the rest of the resources sector.

But according to the global resources fund manager BlackRock, one of BHP's biggest and most influential shareholders, there has been a factor at play that is unique to BHP - its $US20 billion push into the US shale gas industry earlier this year.

The head of BlackRock, Evy Hambro, said last month that the lack of clarity over BHP's shale gas ambitions had not helped the group's share price performance.

''They've now embarked on a relatively aggressive [push] into a commodity that no one knew they liked [shale gas], and until they are able to educate investors as to the reasons why they have gone and done these transactions there are going to be some question marks around the use of that capital,'' the London-based Hambro said on a flying visit.

''We are waiting to be educated by BHP on these transactions … there are some question marks whilst we are in the dark,'' he said.

Hambro is to get what he has been asking for, with the chief executive of BHP's Houston petroleum division, Michael Yeager, to host an investor briefing at 6pm today.

The group's shale gas push will be front and centre of the briefing, most particularly the BHP view that the controversy surrounding the use of hydraulic fracturing (fracking) to extract ''tight'' gas from deeply buried shale formations is overdone.

Expect Yeager to emphasise that there is a fundamental difference between shale gas fracking and the equally controversial fracking of coal seams. The difference is that shale gas fracking occurs at greater depths so contamination of shallower aquifers is not the issue it can be in the coal seam gas industry. Still, the controversy about fracking is not going to go away in a hurry. Having said that, investors will be more interested in just what sort of returns BHP expects to generate from its shale gas push, and what growth it sees ahead.

And Garimpeiro will be interested to see what sort of boost Yeager's briefing gives the fast-emerging shale gas sector in this country, and the host of juniors that are now hitched to the wagon. While the coal seam gas sector is fast becoming a $50 billion industry here, shale gas is only taking off, hoping to emulate the success the US industry has had.

The US Energy Information Administration believes that Australia's basins could be home to as much as 396 trillion cubic feet of technically recoverable shale gas. That's four times the current estimate for conventional reserves of gas.
Technically recoverable reserves is a very different measure to economic reserves, with Australia not boasting the market size or pipeline network that has been so important in underwriting the development of the US shale gas industry.

There are probably more than 20 juniors that have an exposure to the emerging shale gas story here. They include Beach, Cooper Energy, Drillsearch, Icon, Senex, Strike, and Austin. Beach's successful $94 million on-market bid for Adelaide Energy last week was all about getting hold of Adelaide's joint venture interests in the Cooper Basin's Nappamerri Trough.

Ambassador Oil & Gas can also be added to that list. It is a new float that is seeking $15 million to $20 million to pursue both traditional oil and gas opportunities in the Cooper Basin, as well as the shale gas potential of its permit in the Patchawarra Trough, which is a neighbour to the Nappamerri.

It is headed by Tino Guglielmo, formerly the managing director of Stuart Petroleum, now part of Senex, which is itself the renamed Victoria Petroleum. Guglielmo began selling the float last week, and like BHP's Yeager can expect today, he is finding huge interest in Ambassador's shale gas leg