Wednesday, 10 December 2014

So who really owns coal seam gas exploration tenement PEL 445 recently renewed by the NSW Baird Government in the face of regional opposition?

Dart Energy (Bruxner) Pty Ltd registered in Brisbane, Queensland, in February 2013 has successfully applied to have its coal seam gas exploration licence PEL 445 renewed for a further six years by the NSW Coalition Government.

According to the minister; Dart Energy is only permitted to undertake low impact exploration activities including data review, mapping and technical evaluation. Any other activities require further approvals and are subject to the Government’s strict new conditions and regulations.

As required by legislation the company had to relinquish 25 per cent of its original tenement (choosing sections which contained no identified commercially viable gas deposits) when applying for the licence renewal and this is the amended 5,868 sq km exploration lease:

The Dart Energy group was spun off from Arrow Energy Pty Ltd in 2010, when that company was taken over by Royal Dutch Shell and PetroChina. Most of Dart Energy’s current management team was originally with Arrow Energy.

Dart Energy acquired PEL 445 then covering approximately 7,100 sq km centred about 39 km WNW of Lismore (containing 15 wells) from Arrow Energy in 2013.

On 12 May 2014 The Sydney Morning Herald reported:

Dart Energy has abandoned hopes of emerging as a global player in non-conventional gas, agreeing to a scrip merger from a UK operator that will see it dump all its non-UK assets.
Dart has agreed to merge with IGas Energy, which is listed on London's secondary AIM market, via a scheme of arrangement.
Dart shareholders will receive 0.08117 IGas shares for each Dart share held, which values Dart shares at just 18.98¢ and the entire company at $211.5 million.
Dart shares last traded at 12.5¢, a far cry from their levels above $1 three and four years ago.
Agreeing to the merger will see longstanding Dart shareholders lose out following a series of changes of strategy as the group has floundered in recent years.
Its most recent raising of $20.7 million at 9¢ will see shareholders who took up that offer last September come out in front, although its 2011 raising of $100 million at 75¢ a share has left shareholders with bruising losses.
Soul Pattinson's New Hope Corp has a 16.3 per cent stake in Dart and has backed the merger proposal in the absence of a rival offer emerging, as have shareholders with a further 14 per cent of Dart's capital.
Dart has sought to undertake a series of changes over the past few years to put its operations on a viable footing, which included listing offshore assets in Singapore and, after that failed, seeking a listing in London, which now has been abandoned.
Dart was spun out from Arrow Energy in 2010, when Arrow was bought by Shell. Dart took the offshore assets of Arrow, which it bolstered by acquiring Apollo Gas, giving it a suite of domestic assets. But the company has struggled, making limited progress in developing its extensive asset portfolio despite high gas prices.
It recently booked $43.5 million of impairment charges, mostly relating to the writing down of assets in NSW and the UK. It also has sold some offshore assets, such as in India.

In October 2014 IGas Energy announced:

As part of the October 2014 acquisition of Dart Energy, the Group holds a number of Coal Bed Methane (CBM) exploration licences across Australia, Indonesia, India and Germany.
IGas will continue to progress Dart’s previously announced divestment plan. IGas will Operate non UK assets where it is contractually obliged to do so…..
In Australia we hold our licences under a care and maintenance basis.
We currently hold seven petroleum exploration licences all located in the state of New South Wales.

PEL 445 is one of those exploration licences.

IGas Energy Plc is a leading British oil and gas explorer and developer, producing approximately 3,000 barrels of oil and gas a day from over 100 sites across the U.K. IGas assets are predominantly 100% owned and operated by this corporation

The only reasonable conclusion to be drawn from the NSW Baird Government’s renewal of the exploration title PEL 445, is that the application made through IGas subsidiary Dart Energy (Bruxner) Pty Ltd sought to increase the value of this asset ahead of any sell-on of the title.

Therefore, the assurances given by the NSW Minister for Resources and Energy as to the character of the nominal owner of PEL 445 are as ephemeral as a burning sheet of paper.

Gasfield Free Northern Rivers has echoed the sentiments of many communities across the Northern Rivers, from the NSW-QLD border down to the Clarence Valley:

Gasfield Free Northern Rivers has welcomed Dart’s surrender of twenty five per cent of PEL 445, which it says ‘covers the Ballina electorate’.
But it describes the move as, ‘only a small step in protecting our area from the practice of invasive and dangerous unconventional gas extraction’.
‘This is only a part relinquishment and a very large area of PEL445 and the rest of the Northern Rivers remains open to unconventional gas exploration and fracking,’ said Gasfield Free spokesperson Dean Draper
‘It’s crucial our region’s water supplies and our agriculture and tourism industries are protected. Our community is calling for a full cancellation of the entire PEL 445 and all of the petroleum Exploration Licenses in the northern rivers.’
‘We need to have certainty in protection, until all of the licenses are cancelled the future of our regions clean and green image remains at risk.’ he said
‘It seems this announcement by minister Roberts is motivated by the fact that the Ballina electorate is considered a vulnerable seat by the NSW government in the lead-up to the NSW election.
‘However, the impacts of invasive gasfields stretch across electorate boundaries, and our community will not rest until the entire northern rivers receives the protection it deserves.’ Mr Draper said.

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