Australis Oil & Gas reunites the management team behind Aurora Oil & Gas, which was one of Western Australia's biggest takeover success stories when the company was in the right place at the right time to get involved on the ground floor in the Eagle Ford Shale play.

Aurora was later sold to Canada's Baytex Energy for around $2 billion … just before the collapse in the oil price, and Baytex's fortunes have been mixed since.

Energy News understands that the group behind Aurora - chairman and founder Jon Stewart, technical director Ian Lusted, finance director Graham Dowland and commercial manager Malcolm Bult - is now on the east coast with Euroz Securities sounding out interest in the float.

Australis has already raised around $35 million in private placements since December, and will be seeking a modest $50 million from its IPO, to give it a market capitalisation of around $100 million.

Since its creation in December Australis has been engaging in a counter-cyclical investment strategy putting together assets in the US and Portugal.

The spine of the Australis float is the Tuscaloosa marine shale across Louisiana and Mississippi.

The Tuscaloosa is an underexplored Late Cretaceous shale that has been subjected to some drilling activity in the past 20 years, but it has not been commercial for most of that time.

The shale is usually between 200-350m thick and sits between 3300m and 4500m deep, beneath the prolific Austin Chalk and is reported to have better porosities than the Eagle Ford Shale.

A number of wells were drilled with some success in 2014 and 2015, but since oil prices came off the Tuscaloosa has again been relegated to non-core status by a lot of companies, many of whom focused on the easier Eagle Ford Shale.

One of the biggest players in the Tuscaloosa, Goodrich Petroleum, has indicated it is walking away from much of its acreage to focus on the Haynesville Shale.

Goodrich announced that it had completed more than a dozen wells with initial flow rates above 1000bopd, so the potential exists in the marine shale, it just needs a much higher price, most likely closer to $US70 per barrel, although LSU Center for Energy Studies David Dismukes says the Tuscaloosa is the most expensive formation in the country, requiring as much as $US90/bbl to turn a profit because of mechanical challenges.

But the prize is an estimated nine billion barrels across the middle of Louisiana alone, a prize left behind by a string of bankrupt companies such as Goodrich, Penn Virginia and Halcon Resources.

Other leaseholders such as Comstock Resources and Sanchez Energy remain interested, if not active, and Helis Oil & Gas is looking to drill a well, but it has struck legal issues in St. Tammany Parish over its plans to frack in a residential area and is fighting for permission in the courts.

Since 2011 there has been 1MMbbl produced from the Tuscaloosa, according to the Louisiana Department of Natural Resources, a level close to what the Eagle Ford Shale does daily, and the Tuscaloosa has less than 30 wells in production from around 80 horizontal wells drilled to date.

As it did within the Eagle Ford Shale, Australis is hoping to silence the doubters and it has pulled together a 50% working interest in some 33,000 mostly contiguous acres with operator Paloma Partners, although it has the right to assume operatorship from 2018.

Houston-based Paloma is backed by EnCap Investments and Macquarie Mining and Energy Capital.

Australis already has a chief operating officer in the US, ex-Aurora man Michael Verm, although it says its interest is a land play, with minimal work expected until either the oil price recovers or drilling activity recommences by third party operators on adjacent leases within the trend.

Australis' second focus area is exploration onshore Portugal.

Australis has been granted two concessions covering some 620,000 contiguous acres in the onshore Lusitanian Basin for eight years and it is seeking a third licence.

Portugal has no domestic hydrocarbon production and is under-explored with only 148 onshore wells having been drilled, but most wells have had shows.

Australis says the concessions offer large scale, material conventional and unconventional oil and gas targets at shallow targets.

Wells drilled to less than 500m have shown two working hydrocarbon systems, and there is a large volume of 2D and 3D seismic the company can use to develop targets for drilling.

The ASX listing is expected in the second half of the year.