Tuesday, 18 November 2014
Metgasco Limited intends to stay put on the NSW North Coast despite widespread community opposition to gasfields being established in the region
ABC NEWS 13 November 2014:
Metgasco is unlikely to take up any offer from the State Government to buy back its licence to operate in the Northern Rivers.
Today's CSG policy announcement included provisions for a one-off buy back scheme of previously approved licences.
But Metgasco managing director, Peter Henderson, said the company has spent too much time and money in the region to walk away now.
Metgasco media release 14 November 2014:
Response to NSW Government Gas Plan
Metgasco Limited welcomes the NSW Government’s recognition that gas supplies are essential to the future of NSW and that the gas industry can be managed safely.
Metgasco is, however, concerned about the repeated changes in regulation and policy since the current Government came to office and the uncertainty the latest announcement has created.
In March 2011 the NSW Government effectively put a hold on the industry while it created new regulations, which included a Strategic Land Use Policy and a myriad of other regulations. In September 2012 it announced that the industry had the toughest standards in the world and gave the green light for exploration and development to proceed. It correspondingly renewed exploration licences and announced the approval of Metgasco’s first production licence (just south of Casino).
Since then it has taken a number of actions which have had the effect of stifling the industry.
The new policy announcement does not sufficiently clarify the business and regulatory environment for the gas industry in NSW. Business needs a degree of certainty to justify expenditure. We now have new rules and regulatory responsibilities, many of which will not be defined until well into 2015, uncertainty about the rules for land holder compensation and some indication that the royalty regime might change to encourage exploration.
Metgasco has invested approximately $120 million over the past ten years exploring for natural gas in NSW and has established the second largest gas resource in the state. It did so with the expectation that its exploration rights would be respected.
Metgasco is seeking a meeting with the Minister for Resources and Energy to clarify the impact of the new policy on the potential of the significant gas resource in the Northern Rivers region.
It is important that the NSW Government sends a message to all investors that NSW is a place in which investment can be made with confidence.
Metgasco Limited's ordinary share price is languishing at five cents.