PFRRF Petrofrontier Corporation (PK)

By Katarina Gustafsson

Norwegian oil and gas major Statoil ASA (STO) Wednesday said it has entered into Australian shale gas exploration projects through a joint venture deal with Toronto-listed company Petrofrontier Corp. (PFRRF).

Statoil said it had moved into four of Petrofrontier's existing exploration permits as well as two pending exploration permits in the South Georgina Basin in Australia's Northern Territories in a joint venture project.

"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," Statoil said in a statement.

The partners have agreed to drill between ten and 20 wells by 2017 in three phases of which Petrofrontier will operate the first phase while Statoil has secured options to operate from the second phase.

The Norwegian company has committed to invest $25 million in the first phase of the exploration and said the figure could escalate to $100 million through a phase two and three depending on what results are obtained.

-Write to Katarina Gustafsson at katarina.gustafsson@dowjones.com