Aubrey McClendon's American Energy Partners, which has primarily focused on North American basins, has apparently decided that the Greater McArthur Basin is an irresistible target with blue sky.

Yesterday Wall Street Journal reported that McClendon, who has been accused of stealing documents and intellectual property from his former company, is keen to take a position in the effectively unexplored basin, a basin that is completely leased or under application.

It means if AEP wants to get into the area it needs to deal with some of the major landholders in the area.

Energy News has been told AEP is close to signing up a deal with Paul Fudge's Pangaea for control of EPs 167, 168, 169, 198 and 305 that located in the western McArthur and central Beetaloo basins southeast of Darwin, adjacent to the towns of Elliot and Katherine in the Northern Territory.

Described as "one of the true mystery men of the BRW Rich 200", Fudge shot to prominence when Origin Energy bought one of Pangaea's tenements in the Surat Basin for $70 million in 2006 and another in 2009 for $660 million. Three years later, Origin came back for more, outlaying $660 million for another of Fudge's tenements.

He was an early mover in the CSG space, especially in Queensland and New South Wales, and Pangaea now owns a spread of assets considered to have shale potential across Australia, including the remote Officer and Canning basins in Western Australia and the Victoria River/Birrindudu basins in the NT.

Previously, many explorers considered that the Palaeoproterozoic to Mesoproterozoic sequences of the McArthur and Beetaloo basins were too old to preserve hydrocarbons; however, sampling work conducted by Pangaea and recent exploration in the area has proven this to be incorrect, with a number of wells recovering hydrocarbons.

Much of the basin remains a greenfields exploration province with past exploration limited and information on the basin architecture and geological evolution is lacking.

A range of players, including Armour Energy, Empire Energy, and Santos are major landholders in the area, and Ireland's Falcon Oil & Gas is set to team up on a three-well program in the adjacent Beetaloo Basin with Origin Energy and Sasol.

McClendon, who drove Chesapeake to develop the Barnett, Fayetteville, and Marcellus shales, is known to spend big on high risk gambles.

The McArthur Basin would certainly fit that.

Armour has drilled a number of promising gas wells around the Batten Fault Zone in the NT, and has assembled a substantial portfolio of assets, primarily gas, with two granted leases covering some 107,000sq.km in the McArthur, Georgina and South Nicholson basins.

Its work in Queensland has flowed unconventional gas from shales, and it has put some significant prospective resources on the Barney Creek Shale and Lawn Hill Formation, and allowed it to define its emerging Tawallah Group source rock play over 52,000sq.km.

Armour says there are trillions of cubic feet of gas within its eases, as well as significant liquids.

Armour has also been very vocal in completing a farm-in deal recently, and Energy News understands a deal is very close

While a less likely target, Empire has conducted some shallow shale stratigraphic drilling that indicates the potential for liquids generating shales in the region in the Barney Creek Shale and the Meso-Proterozoic Velkerri Formation, where again there is potential for multiple Tcf of gas.

Santos' Tanumbirini-1 exploration well, located in EP 161, was spudded in June 2014 and was drilled to a total depth of 3945 metres.

Multiple thick intervals of organic-rich rock were intersected at the primary objective Mid-Velkerrie level, accompanied by significant mud gas shows.

Elevated gas readings were encountered over a total gross interval in excess of 500m.

A 90m core was taken and extensive wireline evaluation conducted. The well was cased and suspended for re-entry in 2015, which could be a key milestone in the basin.

AEP is being advised by Morgan Stanley & Co and backed by private-equity firm Energy & Minerals Group, which has the option to participate individual ventures.

The colourful McClendon was forced out of Chesapeake in 2013 by shareholders after "philosophical differences" with a new look board.

In February, Chesapeake sued McClendon in Oklahoma County District Court, alleging that he had misappropriated confidential information about resource prospects in Ohio during his last days in office.

McClendon denied the accusation and said that his access to the information had been specifically agreed as part of his agreement to depart the company. He had previously been questioned over $US3 million of work done by Chesapeake employees for his personal affairs, including renovations on his home, and his use of the company's planes for non-business use.

He was cleared of impropriety because his contract allowed such uses.

Shortly after parting ways with Chesapeake McClendon set up AEP and raised $US14 billion in total equity and debt to to get into the Permian Basin, and the Utica, Woodford and Marcellus Shale formations.

Chesapeake says the Utica areas were the same ones it was targeting.

The usually secretive Pangaea, which prefers to operate out of the public eye, has been contacted for comment.

The 66-year-old Wollongong-born Fudge was a successful textile importer and retailer who moves into CSG in the 1990s after noticing the developing coal seam gas sector in the US.

He is also a major shareholder in diversified drilling concern AJ Lucas via his Hong Kong-based private equity firm Kerogen Capital.

AJL is a major shareholder in European shale hopeful Cuadrilla Resources.