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What Does the Oil Shale Discovery Mean to Property Investors?

Posted by Paul Wilson

By Paul Wilson

Lately there has been much talk about the recent major oil discovery in the northern corner of South Australia. In fact, many property investors are already considering property in these areas. But what exactly does this discovery mean for property investors and how can one do the research needed to know whether to invest or not? Would this be a good time to invest in realstate in these areas? Is the realestate market going to boom near these deposits? Will this drive Australian property Prices higher?

The short answer to the first part of the question is that this discovery doesn’t mean much for property markets at this point so if you suddenly hear of hot property as a result of this find, be careful. Allow me to explain.

The long answer to these questions is that the oil which has been found is actually oil shale and is buried deep within the ground. Hence, although this is a discovery on the scale of "Saudi Arabia" as some news organizations have called it, getting to it could be cost prohibitive at this stage. Thus, the head of Linc Energy, which holds the leases for the area has warned that it is too early to tell whether mining these deposits would be profitable or not. Certainly, if they decide it is not profitable there will be no mining. Hence, properties in the region will be largely unaffected.

If however, they do decide to mine then investors can anticipate a rising demand and hence prices for properties within range of the fields mined. The map below shows the deposit locations as they are believed to exist at the moment, but where mining would occur is anyone’s guess. So to seek property at this point would be speculation and would carry some risk. How so?

To start with, until it is known where mining will occur, the property will not be affected other than the normal order of business. If a property you locate near this region is able to make you positive cash flow, then by all means buy it. The worst that can happen is you make a little bit of added income. The best is that mining does occur nearby and you make even more.

But just don’t plan on buying undeveloped land with the belief that it will be worth plenty when the mining takes place for no one, not even Linc Energy knows what will happen at this point. Also, be on the alert for Property Spruikers trying to sell you land now as they seek to capitalize on the ignorance of many unsuspecting investors.

The way to know what to do these days is simple. Do a bit of research.

I checked with various sources online and discovered what I have already stated above. This is not crude oil, but oil shale which is much harder to extract usable petroleum from. Everything at this point is mere speculation so property investors should be cautious unless they have deep pockets with which to gamble.

However, in doing this research I came across a sure thing.

Have you heard of the Carnarvon basin?

Not much is being said about this location, but according to the Oil and Gas Journal, Chevron has just made its 20th discovery of LNG in this region and is thus expanding operations there.

Hence, if you are seeking a sound location for investing in hot property, see the next image. This shows the location of the Carnarvon basin where Chevron is certainly stepping up production.

The point is, finding the facts regarding realestate property is not difficult if an investor keeps his or her wits and checks reliable sources. The least reliable are the news agencies which get ratings from sensational stories and the property spruikers who make a killing from unsuspecting buyers.

Check with the sources, the companies actually planning the operations. Check industry sources and check with governmental agencies involved. If you do this, you can find real hot property for sale.

The goal of Educating Property Investors is to teach you how to invest in properties which will profit you and help you build your portfolio. If you would like to continue to be better informed, be sure to sign up for our newsletter.


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