International gas giant Chevron has announced it has reached an agreement with Beach Energy to acquire two onshore gas blocks covering an estimated 810,000 acres in the Cooper Basin.

The agreement provides an opportunity for Chevron to conduct exploration and evaluation efforts for the potential for natural gas from shale and tight gas development.

Under the agreement, Chevron acquires an initial 30 percent working interest in the Permian section of PEL 218 in South Australia and an 18 percent working interest in ATP 855 in Queensland. Ultimately, Chevron could earn 60 percent working interest in PEL 218 and 36 percent working interest in ATP 855 via staged earning.

“Chevron continually looks at opportunities to expand its resource base and add to its asset portfolio globally. This opportunity potentially gives us additional high-quality resources with long-term growth potential which aligns with our business strategy,” said Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company.

South Australian Premier Jay Weatherill welcomed the announcement, describing it as a vote of confidence in the State’s unconventional gas industry.

“Less than a year after the tap was turned on Moomba-191, Australia’s first commercially operating shale gas well, Beach Energy and Chevron Australia are joining forces to further explore the commercial potential of our unconventional gas resource,” Mr Weatherill said.

“The US Department for Energy estimate unconventional gas can provide a further reserve of 85 TCFs, which translates into centuries of supplies right next to existing infrastructure connecting the Basin to export markets and customers here and interstate