Metgasco says it could be back drilling at Bentley within three months

Within hours of the NSW Supreme Court handing down its judgment in Metgasco Limited v Minister for Resources and Energy, Metgasco Limited publicly stated that it could be back drilling at Bentley in the Northern Rivers region within three months.

I’m sure the Northern Rivers community will be there to greet the return of this coal seam & tight gas mining company with its own unique, non-violent and uncompromising resistance.

Metgasco misses out on NSW compensation offer

The Australian 10 April 2015:

At close of business on Friday10 April 2015 the Australian Stock Exchange listed Metgasco's ordinary share price at 0.023 cents.

Metgasco Limited v Minister for Resources and Energy is listed for judgment in the NSW Supreme Court at 10am on Friday, 24 April 2015.

ERM Power would like to bail out of coal seam gas miner Metgasco Limited ?

Metgasco Limited's largest shareholder appears to be losing interest in the fate of this coal seam/tight gas explorer and wannabe production company.

Unfortunately with the ordinary share price being firmly in the 2 cents range, ERM Power will have to wait before any move to sell off its interest in this company.

Argus Media

ERM Power mulls future of NSW gas assets

22 Feb 2015, 11.48 pm GMT

Sydney, 22 February (Argus) — Australian power and gas group ERM Power is still considering the future of its gas interests in New South Wales (NSW), which include an interest in independent coal-bed methane (CBM) gas developer Metgasco and some exploration areas.

ERM bought a 13pc stake in Metgasco in 2013, but the CBM exploration group has been hampered by a NSW government ruling halting further exploration at the company's Casino project because of community concerns and there has been no resolution to the issue.

"These assets are being impacted by regulatory uncertainty in NSW which, at this point, seems far from being resolved. We will continue to keep these assets on minimum expenditure until investment conditions materially improve," ERM said.

The company also operates its 100pc owned 332MW Oakey peak demand gas-fired plant in Queensland, which was only used 3pc of the time during July-December last year. Oakey reported a 3.8pc fall in its asset value from a year earlier to A$223mn ($174mn) in the six-month period. There were increased opportunities for Oakey because of higher volatility in electricity prices in Queensland during the 2014-15 summer, ERM said, with electricity spot market prices reaching the maximum price cap of A$13,000/MWh on numerous occasions.

km/rjd

On 24 February 2015 Metgasco Limited released its Financial Report For Half Year Ended 31 December 2014.

In the last six months of 2014 it recorded a loss of $2,105,164 with $955,547 of this figure listed as professional fees.

Presumably these fees are associated with its court case Metgasco Ltd v Minister for Resources & Energy which has been waiting judgment since the end of October 2014.

Since announcing its script merger with Elk Petroleum on 22 December involving a convertible loan facility for Elk of $2.5 million, Metgasco has lent Elk a further $1.4 million this year.

Metgasco's ailing fortunes will not have been helped by the fact that one of the main planks in its argument for the establishment of Northern Rivers gasfields - ie. that these gasfields would bring down the cost of gas for business and residential users - has been contradicted by the Select Committee on the Supply and Cost of Gas and Liquid Fuels in New South Wales (25 February 2015) report which states gas prices; will rise regardless of whether there is an indigenous supply...Eastern Australia is becoming part of a single global market for commodity gas, and wholesale prices are being increasingly set by international prices. In the future, it is likely that NSW gas retailers will have to compete with offshore demand and pay export parity prices for wholesale gas.

Metgasco Limited: one picture is worth a thousand words

The Australian Stock Exchange, 11 February 2014:

Metgaso Limited (MEL) ordinary fully paid share $0.025 11 February 2015
Price $0.025 Volume 201,874.00 10 February 2014
Price $0.027 Volume 2,035,560.00 9 February 2015
Price $0.030 Volume 267,328.00 6 February 2015

The chart of daily prices over 1 year for security MEL

Are the punters finally abandoning coal seam/tight gas explorer and wannabe production company Metgaso?

Coal seam gas explorer Metgasco Limited's small shareholders are talking to the Australian Stock Exchange?

HotCopper MEL thread, 27 January 2015:

I have just sent my email to ASX (Elvis) as suggested by previous posters.

My concern has been increasing as I watch my other Oil Co investments slowly dribble down the toilet and I really have no interest in having more capital tied to the oil industry at present (Gas & Iron Ore are bad enough).

The text of my email is below.

"Dear Sir,

I have recently become aware that MEL intends to become involved with a US based oil company ELK Petroleum Ltd, by way of a merger of script. There has been significant disquiet amongst shareholders of MEL, as the MEL Board has determined that the transaction need not be put to shareholders for approval.

A number of shareholders (via HotCopper shareholder site) have suggested that the ASX should be requested to use their discretion under Section 11.1.2 of the Listing Rules to consider whether to call upon MEL to seek shareholder approval via a vote on the proposed MEL/ELK merger.

I believe that you may have received emails from some of MEL's shareholders and I would like to add my voice to their request for your consideration of a review of the proposed transaction, or at a minimum request MEL to explain why they have decided to exclude shareholders in the making of this significant move into the US shale oil industry away from domestic gas.

Yours faithfully

(Name included)
Concerned shareholder"

That not-so-stellar progress of the Australian gas industry

The Australian 14 January 2015:

PLUNGING  prices for liquid natural gas are dashing state and federal expectations of a revenue bonanza from the country’s massive new gas projects, with at least $2 billion being stripped from tax and royalty forecasts.

The seven giant projects being built at a combined cost of about $200bn represent the largest capital investments made in ­Australia and are still expected to be financially viable.

But as prices tumble, the ­industry’s export revenue could be as much as $20bn a year lower than was expected a year ago.

The mid-year budget update released just before Christmas had factored in the oil price falling by a third, with the drop feeding through to LNG prices. The fall has surpassed 50 per cent.….

From a sovereign risk perspective, it is essential that these projects continue to be able to service the foreign debts that have largely financed their construction. Industry analysts believe the projects will still be able to cover their operating and financing costs at current prices, but they believe they would not have been built if current ­prices had prevailed when they came before boards for approval.

“If you knew then what you know now, some may not have proceeded because the rate of ­return on our estimates are below what we think is needed to justify going ahead, but when you’re half-way through the construction, you’re also half-way through the money and there’s no going back,” UBS energy analyst Nik Burns said.

The recent round of state and federal budget updates downgraded estimates of royalty and resource tax revenue from the gas industry, to reflect the weaker price outlook, but prices have fallen a lot further since budgets were ruled off before Christmas…..

For the very junior cowboys in the coal seam gas section of the industry this is not good news.

Some, like Metgasco Limited, are already facing strong headwinds and share price continues to reflect this.

Three month chart ordinary shares sold on the Australian Stock Market (ASX)

Twelve month chart ordinary shares sold on the Australian Stock Market (ASX)

Ten year monthly average ordinary shares sold on the Australian Stock Market (ASX)

Some Metgasco Limited shareholder disquiet over merger with Elk Petroleum

From the HotCopper MEL forum on 29 and 30 December 2014:

As doctornoh raised in post #14500228 the MEL Board notes that "Metgasco has applied to the ASX seeking in-principle advice as to whether ASX will exercise its discretion to require Metgasco to seek shareholder approval to proceed with the transaction, and if so, whether ASX will require re-compliance with Chs 1 and 2 of the Listing Rules. Having regard to the circumstances of this transaction, Metgasco does not presently intend to seek shareholder approval unless ASX requires Metgasco to do so;"

This is perhaps surprising as it indicates MEL may not have, as recommended by Section 2.8 (a) of Guidance Note 12, applied for in-principle advice from ASX about the application of Listing Rules 11.1.2, 11.1.3 or 11.2 to the transaction before proceeding with the transaction. 

This may indicate that MEL is hoping to pressure the ASX into just waving the transaction through.

Of course one of the easiest methods to ensure that the ASX did not require re-compliance with Chapters 1 and 2 of the Listing Rules would have been to ensure that shareholders had sufficient information about the proposed transaction for trading to be occurring on a reasonably informed basis or to seek shareholder approval of the transaction as permitted under the Guidance Note.

Of course, the Board and management of MEL (either through ignorance or deliberately) seem to have previously adopted a relatively caliver [sic] attitude to the Listing Rules. Even with this most recent announcement, as an oil and gas exploration entity that is not earning any material revenue from operations, MEL appears to have ignored the recommendation of Section 2.8 of Guidance Note 12 and failed to provide any indication of annual expenditure that will result from the proposed arrangement with ELK.

In addition, for the AGM in 2013, in an apparent attempt to inhibit the challenge from disaffected shareholders, the Board issued papers calling the AGM, ignoring the requirements of the Listing Rules to provide 7 days notice of this intention. To further compound this failure, the Chairman then assured all shareholders at the AGM that the Company had fully complied with the requirement for the 7 days notice.

It is also well known that anti csg protestors in the Northern Rivers (perhaps with little justification) have complained that MEL may not have fully complied with the continuous disclosure requirements in relation to the provision of advice as to the extent of protestor activity in the MEL area of operation.

In the absence of significantly more information, it is very difficult for MEL shareholders to determine whether the transaction is in their best interests. While it is likely the Independet [sic] Experts' report prepared for ELK shareholders will provide substantially more detail, the purpose of this report is not for the benefit of MEL shareholders. The transaction may well represent a substantial opportunity for MEL shareholders, but on the surface there appear to be significant questions. The main asset being acquired, the Grieve EOR development, appears to have a very troubled history. It appears that ELK initially believed total field expenditure of less than USD28.6 million was required before the development became cash flow positive. Currently total field expenditure stands at USD70 million and it is forecast that there is at least two more years before first oil production and any chance that the project could become cash flow positive. Initial pressurisation of the field commenced one year later than originally planned and first oil is now forecast to be running up to three years later than initially planned.

There is no doubt that the transaction represents a significant change to the scale of MEL’s activities. 

Read the full comment here.

Thought I might shortcut the need for research on ELK's prospects and look at what shareholders have been saying on HotCopper. Well it was truly depressing, ELK seems to have a long history of optimistic promises and then, not just under delivering, but totally failing to deliver at all.

One indication of the very low enthusiasm for the stock can be gained from looking at the last Company’s Share Purchase Plan which closed on 16 July 2014. The SPP provided for all shareholders to subscribe for up to an additional $15,000 worth of shares at an issue price of $0.12 per share with subscriptions capped at $3,000,000. There was also one free option attached to each share acquired. So 25,000,000 shares were on offer. But only 2,600,000 shares, just over 10% of those on offer were taken up by shareholders. Only two (of the five) directors took up the offer and then at less than 50% of their entitlement. Of course it didn't help that the ELK share price was only $0.13 at the time the SPP was announced and then promptly dropped below the $0.12 offer price and stayed there for most of the offer period. And the ELK share price has never been above $0.12 since.

Great vote of confidence by the apparently badly disillusioned shareholders. Further it looks like the underwriters and sub underwriters bailed, taking up only $688,000.08 of the underwritten $1,000,000. One sub underwriter for $150,000 looks like they bailed totally.

But the other interesting thing is that only one of ELK's long term posters has bother [sic]  to post anything to HotCopper about the merger. Maybe they are all laying low, hoping like Christ that the merger goes through. The register is dominated by large holders, with the top twenty holders at 30 June 2014 holding 60.63% of the issued shares. This is a little down on the 64.28% held by the top twenty at 30 June 2012 but substantially up on the 39.62% held on 30 June 2005 just after listing…..

The AUD1.25 million loan due to be repaid on 8 January 2015 was from private individuals, likely to include some of same large shareholders from the top twenty. 

It is beginning to look like the MEL proposal may have more to do with giving these large shareholders a way out of ELK rather than any grand opportunity for MEL. And it certainly guarantees repayment of the AUD1.25 million loan which was looking very shaky indeed. Maybe MEL is looking at these grateful shareholders to provide the proposed March funding.

Read the full comment here.

It would appear that the market also shares investor doubts, as the merger announcement failed to break Metgasco's ordinary share price out of the 4 cent doldrums it has been in since November 2014.

While the Federal Government remains gloomy about the gas industry as a whole: 

“Every oil and gas company in Australia will be cutting back on its exploration and development with oil prices sitting at $60” [Resources Minister Ian Macfarlane in The Australian, 3 January 2015]

BACKGROUND

Elk Petroluem Limited was registered in West Australia on 19 January 2005.

Its principal place of business since December 2011 is Suite 4, Level 9, 31 George Street, Sydney NSW.

Current directors are Anthony James Strasser of North Bondi NSW, Matthew Healy of Chatswoood NSW and, Neale Forest Taylor (Executive Director and Chairman) of Casper, Wyoming USA.

The company has oil interests in Wyoming and Nebraska USA it is seeking to progress.

According to the Annual Report 2014, the company has a number of wholly-owned US subsidiaries: Elk Petroleum Inc LLC,  Grieve Pipeline LLC, North Grieve LLC, Natrona Pipeline LLC and Elk Operating Company LLC.

The company’s largest shareholders as at 20 September 2014 were:

Metgasco considering leaving New South Wales for good?

Metgasco Limited Chairman Leonard Gill at the coal seam and tight gas exploration and wannabee production company’s 2014 annual general meeting, according to the Ballina Shire Advocate on 29 November 2014:

"The government's announcement has again given the green light in principle, but provided another set of traffic lights in practice," Mr Gil said.

He also suggested many gas companies in NSW would be contemplating the government's offer to buy back petroleum exploration licences.

"Given the continuing changing rules and ongoing delays in NSW, it would not surprise if all exploration licence holders - even the largest ones - gave some thought, at least in private, to this option."……

Mr Gil said the company will "continue to pursue opportunities to diversify outside NSW" as the best way to provide value to shareholders.

"Given ongoing delay in the Northern Rivers, the lack of investor confidence in NSW and the outlook for continuing sovereign risk, diversification remains a priority in order to set the company on a growth path," Mr Gil told the meeting.

The Australian Stock Exchange chart of Metgasco ordinary share daily price performance over the last twelve months:

At close of trade on Friday the company's ordinary share price stood at 4.7 cents.

Metgasco monthly ordinary share price charted over last ten years:

Current shareholder sentiment has been described as "depressed" by one AGM observer.

A state of affairs some shareholder comments on the HotCopper forum this month tend to support:

When do you think MEL lost community support and squandered their opportunity?

who says mel management cannot be matched for the ability to destroy shareholder value while holding a great assett?

Cast your mind back several years Henderson and tell me you weren't prepared to walk away then!
Or was that a silly, ill conceived bluff, that may have come back to bite. Still not happy!

Tweed MP Geoff Provest was quoted calling on companies with exploration licences on the North Coast to give them up.
My local MP sucks - does he mean without any compensation (how un-Australian)
Seem to remember you getting out at about 41c danebell when ERM bought in - smarter than me mate. The end may be nearer than we think - best to all Sean.

Wonder what ERM Power are thinking, our largest shareholder with 58,000.000 shares having paid up to 0.60 cents a share in 2011 like the rest of us longtermers, who have been stuck unable to sell our shares because the NSW govt, The Greens and Lock the Gate have ruined MEL's promising future and ours as well.

What 4-traders thinks of Metgasco's immediate future:

Metgasco : East Australia's future gas projects shrink

11/29/2014 | 07:01am US/Eastern

There were three upstream gas projects in east Australia culled during the past 12 months from the list of potential projects complied by the Australian government's commodity forecaster, the Bureau of Resource and Energy Economics (Bree).

The Casino coal-bed methane (CBM) gas Casino project operated by Australian independent Metgasco was taken off the list of potential gas, oil and LNG projects that could be sanctioned in the medium term. Also struck off were the two trains of the Fisherman's Landing LNG project, which was listed as two projects, operated by Australian independent LNG Limited (LNGL).....

Another Bree report this week showed that the 2012-13 fiscal year to 30 June was the first year in more than six years that a new gas-fired power station did not come on line. This was in contrast to 5,135MW of similar capacity coming on line between 2006-07 and 2011-12.

There still remains 7,928MW of planned gas-fired power capacity in Australia, or about 7pc of Australia's installed power generation capacity. But most of these projects are unlikely to be approved during the next two or three years given the current oversupply in the Australian electricity market that has depressed wholesale electricity prices.

Coal seam & tight gas miner Metgasco Limited and community consultation

This is a snapshot from a Metgasco Limited 17 page ‘community consultation’ document dated March 2014:

So is this image a slice of the Berwyndale gasfield in Queensland and is it really a bucolic nivarna as suggested?

Berwyndale and the Undulla Nose gasfields are situated here:

The field configuration in the Metagasco snapshot does not match the Berwyndale South gasfield (left), but appears to be land sandwiched between that intensive gasfield and another to the north. Gas production on this land is apparently not yet fully developed and, the land itself may possible belong to the mining corporation holding the tenement.

Conclusion? 

By not precisely naming the gasfield and limiting the image in its community consultation document to a small number of paddocks, it looks suspiciously like an attempt by Metgasco to conceal the bigger picture in the Berwyndale area.

UPDATE

The 'community consultation' document also states that Metgasco has entered into:

More than 300 voluntary landholder agreements.

These 300 land holder agreements to date appear to cover less than 50 boreholes, 63 drill cores and only two gas sites (NSW Trade and Investment: Energy & Resource MinView) with one potential production well.

However, like its "suscessful co-existence" spin, all is not quite as the community is being told.

The Northern Star, 10 June 2014, Page 4:

When asked about the inconsistency between the claims, Metgasco CEO Peter Henderson said: "We have approximately 50 land access agreements for wells, the remainder are associated with seismic programs." 

Apparently Megasco believes that it is acceptable to fudge the facts during its alleged consultation process.

In which Labor's Walt Secord and The Greens' Jeremy Buckingham nail NSW Nationals' hypocrisy in relation to coal seam and other unconventional gas exploration and mining in the state

The NSW Legislative Council Hansard recorded a seconding reading debate on the Petroleum (Onshore) Amendment (NSW Gas Plan) Bill 2014 which began at 12.50am and ended just before 2am on 19 November 2014.

Here are excerpts from that debate:

The Hon. WALT SECORD  [1.24 a.m.]: As the shadow Minister for the North Coast I speak on the Petroleum (Onshore) Amendment (NSW Gas Plan) Bill 2014. My observations on the bill will centre on North Coast issues. On Thursday 13 November at 10.05 a.m., without warning, the Liberal-Nationals Government introduced this bill in the Legislative Assembly. For a start, the title of the bill is a complete and absolute deception. The bill does not abolish current coal seam gas [CSG] and unconventional gas production licences currently in operation and it does not protect the Northern Rivers region of New South Wales. Furthermore, the Liberal-Nationals Government has put on the table the possibility of reopening the special area of the Sydney water catchment for CSG operations. 

If the purpose of the bill's title is to convey the Government's intention at law, then the bill should have been called the "Unlock the gate and roll out the red carpet for Metgasco on the North Coast after March 2015 bill". That is because that is the intention of this bill. It will allow CSG and unconventional gas exploration to return on steroids on the North Coast after the March 2015 State election. The bill provides no guarantee to the communities of New South Wales, particularly those on the Northern Rivers, that have made their views abundantly clear. But that is no surprise. The Liberal-Nationals Government has already flagged that it will back big corporations over the people of New South Wales every time.

That is why Labor will be moving a number of amendments to the bill to bring it into line with Labor's policy, announced by Opposition leader John Robertson on 29 October. Our amendments will ban coal seam gas from the special areas of Sydney water catchment and from the Northern Rivers, encompassing the local government areas of Ballina shire, Byron shire, Kyogle shire, Lismore city, Tweed shire, Richmond Valley and Clarence Valley……

If the Liberals and The Nationals were interested in responding to community concerns they would have proceeded with a second reading speech by the Minister and then adjourned the bill, allowing the Opposition and crossbenchers to consider it. But their motivation is simple. If the North Coast community had time to consider the bill they would find it lacking in any detail and teeth, and they would see that it was an attempt to dupe them. But what is even more shameful is that not a single member of The Nationals spoke on the bill. I say that again: not a single Nationals member of Parliament spoke on the bill. That is a big betrayal of their electorates—not a word from the member for Tweed, not a word from the member for Ballina, not a word from the member for Lismore, and not a word from the member for Clarence. And out of left field, on 14 November the member for Tamworth popped up in his local media and said he wants to protect the Liverpool Plains. After months of absolute silence, he enters the fray. It was like a scene out of Muriel's Wedding: "Deidre Chambers, what are you doing here? What a coincidence!" It is no wonder that the local community have dubbed The Nationals "Team Metgasco"……        

Mr JEREMY BUCKINGHAM [1.03 a.m.]: I contribute to debate on the Petroleum (Onshore) Amendment (NSW Gas Plan) Bill 2014. What a long and winding road it has been to get to this wafer-thin bill. After nearly five years of policy development, promises, posturing and touting their wares across the countryside the Government came up with a Petroleum (Onshore) Amendment (NSW Gas Plan) Bill that is nothing of the sort. There is no gas plan in this bill; there is no response to the Chief Scientist in this bill. This bill is a thin veneer of the Government's plan to sneak coal seam gas through the next election and launch it onto the countryside. This is more spin, more carpet-bagging, from a government that the people of New South Wales do not trust. 

The Hon. Duncan Gay: Take your koala suit off.

Mr JEREMY BUCKINGHAM: It did not take long to get a rise out of you. The Strategic Regional Land Use plan failed, the Aquifer Interference Policy failed, and the people of New South Wales do not believe a single word those opposite say on this issue. Not even the Government's backbenchers, parliamentary Secretaries or Ministers believe a single word Minister Gay says.

The Hon. Matthew Mason-Cox: Point of order: The member should direct his comments through the Chair and should stop pointing at people across the table. He should take a moment to take a deep breath, relax and be calm.

DEPUTY-PRESIDENT (The Hon. Natasha Maclaren-Jones): Order! The Minister was referring to relevancy. There is no point of order.

Mr JEREMY BUCKINGHAM: We are debating the Petroleum (Onshore) Amendment (NSW Gas Plan) Bill. Where did this bill start? It started with the Hon. Chris Hartcher introducing an onshore petroleum bill back in May 2013. Do members remember him introducing that bill and saying ad nauseam, "These are the toughest rules in Australia"? He went on to say, "These are the toughest rules in the world". What a joke that is! We heard announcement after announcement after announcement and that bill, which passed the Legislative Assembly on 28 May 2013, then disappeared; it was pulled off the Notice Paper on 10 September this year. It died an inglorious death; slowly and quietly culled—euthanased—because it was an absolutely pathetic bill that did nothing to placate the people of New South Wales who have concerns about coal seam gas.

The Hon. Steve Whan said this bill is not very broad. I have seen needles with more breadth and depth than this bill. Talk about pinpoint legislation—it is pathetic. The Government is expunging a handful of titles—and it very nearly could not bring itself to do that—when the people of New South Wales wanted substantive action in this area. They wanted, as the Government promised, areas ruled out of coal seam gas activity. We got some very sensible recommendations from the Chief Scientist that should be applied to extractive industries across the State.

The Hon. Duncan Gay: We're going to do the whole lot.

Mr JEREMY BUCKINGHAM: No you're not. There were dozens of pages in the Chief Scientist's report—I read them—and the Bret Walker report, but did their recommendations turn up in the gas plan? No they did not. Some key things are missing from the gas plan. One of the most important things missing is the recommendations of Bret Walker, SC: The rights of farmers, the rights of communities, to be empowered in arbitration and land access. It says in the Government's response to the review in the most Yes Minister type language I have ever seen:

On 15 April 2014, the NSW Government commissioned Mr Bret Walker SC to undertake an independent review of the land access arbitration processes relating to exploration under the Mining Act 1992 and the Petroleum (Onshore) Act 1991.

The Walker Report … made 31 recommendations to improve the arbitration land access framework. The NSW government has endorsed all the recommendations in the Walker Report relating to the current arbitration framework and committed to a process of implementation commencing immediately where possible."

The Government is committed to a process of implementation commencing immediately, where possible. What an absolute joke! This Government is a farce. No-one trusts this Government and no-one believes this Government. The gas plan is an absolute joke. It is just a blueprint to turn a beautiful State into a toxic gas field. No-one believes this Government.

Do Government members know who does not believe this Government, in particular? The Minister for Mental Health, and the Assistant Minister for Health and member for Wollondilly, Jai Rowell, Gareth Ward, Lee Evans, Mark Speakman, Mark Coure, Stuart Ayres, Chris Patterson, Brian Doyle, Russell Matheson, Rosa Sage, Barry O'Farrell, Don Page, Kevin Anderson, Thomas George, Chris Gulaptis and whoever the Coalition has running as a candidate in Ballina. They all rushed out within 24 to 48 hours of the announcement to state on the public record, "We're banning it. We're banning it." They knew what the community's interpretation of the NSW Gas Plan was. 

It is a carpetbagging exercise by snake oil salesmen who have come into New South Wales communities to sell them a story that New South Wales is running out of gas and this State must have coal seam gas. How many Holdens does New South Wales produce and how many mangoes? Are we completely self-sufficient concerning mangoes? Do we have to have a mangoes industry? We are a federation, a commonwealth, and this issue should be dealt with at the Council of Australian Governments [COAG], not through some carpetbagging exercise by the New South Wales Government. In the context of the most outrageous, erroneous and egregious untruths, I will refer to the Minister's second reading speech, which states:

For example, we appointed a New South Wales Land and Water Commissioner to provide independent advice to the community about exploration activities.

When referring to the framework for community engagement, the Minister stated:

We have also established the Gloucester Dialogue, chaired by the Land and Water Commissioner. The Gloucester Dialogue brings together community, industry and local and State governments to explore issues surrounding the exploration and extraction of coal seam gas in the Gloucester Basin.

This is this the first time in New South Wales this type of dialogue has occurred. Through the dialogue there is regular contact between senior departmental officers and Gloucester Shire Council. Any topic is up for discussion. A community liaison officer from my department operates out of the council chambers two to three days a week. The tenth dialogue meeting was held last Thursday. I commend the Gloucester Shire Council, particularly the mayor, Councillor John Rosenbaum …

Through the dialogue the community has access to all materials relevant to licensing decisions and approvals about AGL's Gloucester gas project.

That is unadulterated rubbish from the Minister because in that very week the man who had the idea for the Gloucester Dialogue, Aled Hoggett—a former councillor of the Gloucester Shire Council—resigned from the Gloucester Dialogue. He did that in the very week when the Minister was spruiking it as the way forward for engagement and the way to sell the Government's gas plan. Aled Hoggett stated in his letter of resignation, "The dialogue was initiated at my suggestion in February this year."…..

Mr JEREMY BUCKINGHAM: Thank you, Madam Deputy-President. "The dialogue was initiated at my suggestion in February this year", Mr Aled Hoggett stated in his letter of resignation from the Gloucester Dialogue to which the Minister referred in his second reading speech. "I hope that Mr Roberts' current assertions would become reality, that we could find a new path to coexistence between coal and gas projects in local communities. Instead I resigned my position on the dialogue early this month. In my opinion, the dialogue has failed and has become an overbearing monologue directed at our tiny and underresourced council. It is being managed to satisfy the requirements for consultation while delivering no such thing. More fundamentally, the dialogue cannot address three major problems in the New South Wales planning system that undermine coexistence between rural communities and the coal and gas industries. The first problem is that the New South Wales planning system disempowers local communities."

Mr Hoggett went on. He resigned from the committee that was his idea and that the Government enshrined in the heart of the Government's NSW Gas Plan because it is a farce—like the rest of the Government's plan. The gas plan is based on a false assumption around economics and on a belief that the Government can say just anything to the community and get away with it. I will read onto the record what Mr Jai Rowell declared in the Wollondilly Advertiser to his community in relation to the announcement of the gas plan: "'It ain't happening, it's over, we won', Wollondilly MP Jai Rowell declared last week", after the gas plan was released. Yet the gas plan refers to the very fact that the AGL gas development in Camden will remain an integral part, in the Government's opinion, of gas delivery in New South Wales. That completely contradicts what Mr Jai Rowell said—"It ain't happening, it's over, we won"; there will be no coal seam gas in Wollondilly. The community is not stupid.

The Hon. Matthew Mason-Cox: It is in Camden. It is not in Wollondilly, mate.

Mr JEREMY BUCKINGHAM: I acknowledge the interjection. The expansion plans of AGL are clearly into the Camden electorate. The member for Camden knows it. The community knows it and they are not being sold a pup on that one. Another very important element of the recommendations made by the Chief Scientist and Engineer that did not make it into the Government's NSW Gas Plan. It should serve as a warning to all people in New South Wales that the Chief Scientist and Engineer concluded her report with these words:

There are no guarantees
· All industries have risks and, like any other, it is inevitable that the CSG industry will have some unintended consequences, including as the result of accidents, human error, and natural disasters. Industry, Government and the community need to work together to plan adequately to mitigate such risks, and be prepared to respond to problems if they occur.

They are wise words by any measure in regard to risk management. How did the Chief Scientist and Engineer suggest that those risks be managed? By Recommendation 9, which states:

Recommendation 9
That Government consider a robust and comprehensive policy of appropriate insurance and environmental risk coverage of the CSG industry to ensure financial protection short and long term. Government should examine the potential adoption of a three-layered policy of security deposits, enhanced insurance coverage, and an environmental rehabilitation fund.
That is a very sensible recommendation. It is something that I would recommend in relation to any extractive industry, in all industries and most undertakings…..

Mr JEREMY BUCKINGHAM: Clearly, there is enormous concern in the community. Does the recommendation to which I have referred turn up in the gas plan bill? No. What we have from this Government is a suggestion that all this will be done after the election—just like after the 2011 State election the Government had strategic regional land use plans that covered the State and protected areas, such as water catchments—"no ifs, no buts, a guarantee". Where did that go? It went the way of the premiership of the Hon. Barry O'Farrell. Those promises were not kept and people will hold this Government to account on its word. People do not believe for one instant that this promise from the Government will be kept. That is clear from the words of Mr Kevin Anderson who, straightaway after the announcement of the gas plan, rushed out to say that he wants the Liverpool Plains to be protected. Other members on the North Coast have said that they want those areas protected. I join them in saying that those areas should be protected. This coal seam gas industry is unnecessary. As the Chief Scientist said, it has major issues in terms of risk.

The Government may argue that it did not have time to do this. Why has it not implemented the recommendations of the Bret Walker review? I would like to hear from the Minister in his reply why the recommendations have not been implemented. There is a massive configuration in the community about land access and arbitration. The Government commissioned one of the best legal minds in the nation to deal with the issue, and he made fantastic recommendations about how to deal with it. The recommendations are widely supported by the environment movement, people in social justice, the legal fraternity and all sides of politics. Yet the Government has not moved. That shows that the Government is not serious and cannot be trusted on the recommendations of the Chief Scientist; otherwise some of the low-hanging fruit in the recommendations would have turned up in this wafer-thin petroleum bill. All the bill does is set out to cancel or expunge—

Mr Scot MacDonald: Finally we can talk about the bill.

Mr JEREMY BUCKINGHAM: I will cover the whole bill in my remaining two minutes. The Government will expunge a number of petroleum title applications, which simply could have been rejected. Will the Government cancel the petroleum exploration licences [PELS] that are up for renewal? As promised, will it protect areas such as water catchments? No, it will not. With this bill, the Government thinks it can erect a thin veil and hide behind it and sneak through to the next election. However, the electors of Lismore, Ballina, Tamworth and Barwon do not want to be guinea pigs in the Government's toxic coal seam gas experiment. They understand that we are a country rich in natural resources. Former Federal Labor and Coalition governments have signed up to a massive export of LNG without proper socio-economic analysis. 

There is a parliamentary inquiry into gas supply and demand. I look forward to that inquiry. We have seen some of the submissions to the lower House inquiry from companies such as Jemena, which say there is no gas supply crisis, there is lots of gas in Bass Strait from conventional sources and all it needs to do is build a pipeline. There are other suggestions for pipelines, et cetera. The Greens are not opposed to fossil fuels…..

NSW National Party invites coal seam/tight gas miner Metgasco Limited's managing director to its Tweed 2014 Christmas Party

Tweed Daily News 1 November 2014:

METGASCO is coming to the Tweed – but only for one night.

Peter Henderson, the controversial managing director of the CSG company that wants to mine near Lismore, will be the guest speaker at the Murwillumbah branch of the National Party’s Christmas dinner on November 26.

Mr Henderson will speak about why the Tweed’s topography made CSG mining in the region unviable, according to National Party member and Tweed Shire councillor Phil Youngblutt.

Cr Youngblutt said he extended the invitation to Mr Henderson after he got in touch with him to endorse his reported comments made in the council that CSG was not a threat to the Tweed.

The dinner at Greenhills Reception Lounge is open to the public. Inquiries to Maureen Coleman on 0427 465 519.

While it has long been obvious that the National Party supports coal seam/tight/unconventional gas mining, one has to wonder why it is that Metgasco's managing director has decided to speak on this particular subject when it was the New South Wales Aboriginal Land Council not Metgasco which had made an application for a special prospecting authority (which it later withdrew) and, it is Dart Energy which has an exploration licence which takes in a small part of the Tweed local government area.

A few facts you may not know about coal seam/tight gas exploration company Metgasco Limited in 2014

Metgasco Limited’s profile in the financial year 2013-14:

* there were only 6,331 shareholders as at 30 June 2014
* had 1,202,222 ordinary shares on offer on 30 June 2014 according to the company's 2013-14 annual report;

* its largest shareholders were ERM Power (majority owned by the St Baker family) and the St Baker family of Queensland who held a total of 13.41% of the company’s fully paid ordinary shares;

* held a 100% interest in three exploration licences on the NSW North Coast covering approximately 4,556km², PELs 13, 16 and 426;

* had three listed subsidiaries, Clarence Morton (No.1) Pty Ltd, Richmond Valley Power Pty Ltd and Loins Way Pipeline Pty Ltd;

* although operating at a loss it paid 5 directors and 1 executive officer over $1.3 million in remuneration;

* paid no tax or royalties;

* had less than 10 employees in total according to statements made to the media in March 2013;

* had no female directors or women in senior executive positions;

* for the convenience of its board and employees maintains one city and one regional office, with the city head office costing somewhere in the vicinity of $112,000 per annum in rental costs;

* a shareholder group tried to unseat the board of directors in September 2013;

* the ordinary share price continues the downward trend which began in 2008;

* appears to have sunk no new wells from 1 July 2013 to date and, according to NSW Resources & Energy mapping has drilled less than 40 gas exploration wells since the company was formed in 1999;
* had no beneficial interest in any farm-in or farm-out agreements;

* in July 2013 there was an explosion during the decommissioning of PEL 16 well Kingfisher E01;

* permission to drill well site Rosella E01 on PEL 16 was suspended by the NSW Government in May 2014;

* had  PPLA 9 and PELA 130 in the Casino district still unapproved as at 30 June 2014; and

* the PEL 426 exploration licence due for renewal in February 2014 has not received renewal approval to date, according to NSW Resources & Energy list of .Petroleum Titles and Applications current as at 1 July 2014.

NOTE: From 29 October 2014 every New South Wales tenement that the company currently holds is covered by the NSW Labor Party policy banning coal seam/tight/unconventional gas exploration and production in the Northern Rivers region.
No judgment has been handed down yet in Metgasco Limited v Minister for Resources and Energy (Case # 201400165970) before the NSW Supreme. 

Metgasco Limited's future plans for gas exploration on the NSW North Coast dependent on NSW Police acting as its agent?

The Northern Star 22 October 2014:

THE QUESTION of what constitutes effective consultation dominated the final day of Metgasco's Supreme Court hearing in Sydney yesterday.

According to Gasfields Free Northern Rivers spokesman Dean Draper, the government's counsel argued Metgasco should have been more transparent about its future plans if the Rosella gas well was successful.

Mr Draper said the government's legal team read from an email from Peter Henderson to Land and Water Commissioner Jock Laurie, which Mr Draper said informed Mr Laurie the company needed to mobilise its drill rig and "needed some help from the government to engage with the community".

The government's lawyers also quoted from a letter from Peter Henderson to the NSW Premier saying the company needed government and police assistance in order to proceed with its drilling and its gas plans for the region…..

Justice Richard Button asked for extra information to be given to him by close of business Friday. It is understood he is under no time constraints. A decision could take up to a year.

One reader’s online comment under this article:

A jaw drop or laugh out loud post

Sometimes the Internet demonstrates just how weirdly incorrect some posts can be.

This post flows effortlessly from the pen of a U.K. contributor to the online version of World Coal magazine.

He obviously doesn’t realise that Metgasco Limited’s drill site at Bentley is a tight gas not an oil sands site and, Queensland’s parliament is not home to the federal government:

The actual letter sent to the Member for Nicklin by the Queensland Parliamentary Service, dated 2 October 2014, can be found at

https://d3n8a8pro7vhmx.cloudfront.net/lockthegate/pages/1490/attachments/original/1412722100/LTG_event_banned_from_State_Parliament.pdf?1412722100

For their sins this is what some Lock The Gate supporters did:

http://vimeo.com/103762184

HD .MP4 file (1280x720 / 57MB)

Metgasco Limited v Minister for Resources and Energy: Managing Director gives evidence

Metgasco Managing Director Peter Henderson gave evidence in Metgasco Limited v Minister for Resources and Energy (Case # 201400165970) before the NSW Supreme Court on 20 October 2014.

ABC News reported on the same day:

Managing Director Peter Henderson told the Supreme Court drilling at the Rosella well was not in order to find coal seam gas but rather "conventional" gas.

But he agreed there was community concern the extraction could involve fracking.

Mr Henderson could not recall police at one stage telling him there may have been more than 2,000 protesters at the Rosella site.

He said Metgasco had been in the Northern Rivers area for about a decade and had previously drilled 50 wells there.

When questioned about community opposition to another well in the area, the Kingfisher Well, he said: "I can't remember any newspaper or public discussion."

BRIEF BACKGROUND

On 14 May 2014 the Office of Coal Seam Gas OCSG put a hold on Metgasco's approval to drill an exploration well at Bentley, near Casino in the Northern Rivers, on the basis that the company was not in compliance with its community consultation obligations under Petroleum Exploration Licence 16 (PEL 16).

Excerpt from Council acts on CSG tip off in the Northern Rivers Echo, 10 November 2011:

Lismore City Council has withdrawn support for seismic testing by Metgasco on Council-owned land in the Rock Valley area after discovering staff had approved an application without the councillors' knowledge.

On September 1 a Council staffer sent a letter to Metgasco approving the testing, but it wasn't until after Tuesday night's Council meeting that councillors became aware of the approval.

Having learnt of an application by Metgasco, Mayor Jenny Dowell moved an 'urgency motion' during the meeting that all requests for CSG and mineral testing or exploration on Council owned or administered land be brought before the Council for consideration. However it wasn't until after the motion had been passed and the meeting concluded that Mayor Dowell became aware that approval had already been granted following a discussion with Rock Valley resident Wanda Halden, who had been liaising with Council staff. Mayor Dowell took swift action and by Wednesday lunchtime Metgasco had been advised that Council's permission had been rescinded….

Greens fear rash of CSG wells, ABC Regional News, 13 December 2011:

The Greens fear that 500 or more coal seam gas (CSG) wells are planned for the New South Wales north coast.

Mining spokesman Jeremy Buckingham says Metgasco has reluctantly revealed its future plans for the region during hearings of the NSW Parliamentary Inquiry into Coal Seam Gas.

Mr Buckingham says such developments will ruin the north coast's environment.

"We believe that if they are to go ahead with their plans for the power station and also a pipeline up the Lyons Way that they would need somewhere between 500 and 1,500 [wells]," he said.

"But the scale of the industry is beginning to emerge and the question is now where do Metgasco plan to put these 500 wells?"

Meanwhile, Metgaco says it has never tried to deceive the public about its fracking operations on the north coast.

Kyogle's Group Against Gas says the company used fracking in the Kingfisher well a year ago.

Metgasco's managing director, Peter Henderson, says that information was made public and he thinks claims that the company tried to hide the fact are unfair.

"No I don't think it's fair. We try to be open and transparent," he said.

"I'd have to say though in a climate like this where there's a lot of misinformation going about and a lot of accusations that are simply uninformed, we probably do need to be careful about the words we use simply to make sure that people respond to the right information.

"But we do our best to be open and transparent. There are no secrets."

Excerpt from Metgasco says it needs 1000 wells, ABC North Coast NSW, 28 May 2012:

Metgasco says it will need about 1000 wells operating in the Casino area to make its economic forecasts come true.

Excerpt from Being fair to all is tough editorial in The Daily Examiner, 9 January 2013, page 10:

A quick glance at our web stats shows more than 300 stories on the CSG issue over the past year.

Excerpts from Metgasco chief issues statement on Kingfisher incident* in The Northern Star, 3 October updated 4 October 2013:

* NIMBIN Environment Centre has accused coal seam gas company Metgasco of initially understating the seriousness of a dangerous incident at its Kingfisher well in July.

And Environment Centre secretary Alan Roberts has said the degraded state of pipes shot from the well, which is on the outskirts of Casino, in the incident meant it was likely toxins associated with coal seam gas drilling had migrated into the water table.

The incident has been the subject of an investigation by the NSW Government's Mine Safety Investigation Unit, as reported last week by The Northern Star, which found some workers at the site "were put at serious risk of harm from falling pipes".

No-one was injured in the incident but it caused "significant" equipment damage, the government report says.

However, in a statement released by the Nimbin Environment Centre, Mr Roberts says Metgasco downplayed the incident.

* METGASCO has rejected claims it understated the seriousness of the incident at its Kingfisher well in July and that toxins were able to pass into groundwater. The company has said it plans to release a statement tomorrow responding to the claims by the Nimbin Environment Centre…..

* METGASCO chief executive and managing director Peter Henderson has issued the following statement regarding the dangerous incident at the Kingfisher well, on the outskirts of Casino, in July….

* Fifteen online reader comments were listed below this article.

Excerpt from The Battle of Bentley* in the Northern Rivers Echo, 7 January 2014:

Metgasco has announced it will be targeting tight gas in upcoming drilling activities.

The company states that the Rosella exploration well at Bentley is targeting tight gas in the Gatton Sandstone formation and looking to the "confirm tight gas potential in the broader exploration area".

 * A tight gas reservoir is one that cannot be produced at economic flow rates or recover economic volumes of gas unless the well is stimulated by a large hydraulic fracture treatment and/or produced using horizontal wellbores.[Oil & Gas Journal, digital magazine]

Excerpt from Protesters resume waiting game as Metgasco drilling on hold in The Northern Star, 2 April 2014:

But Metgasco CEO Peter Henderson refuted claims Monday morning's 2000-strong turnout had derailed the company's plans, saying activities were "influenced by weather and availability of the drilling rig, neither of which we control".

Excerpts from Up to their necks in it, farmers lead coal seam gas protests by example in The Sydney Morning Herald, 12 April 2014:

* Near Lismore late last month, about 2000 people gathered on a rural property to prevent mining company Metgasco from starting exploratory gas drilling in the area….

* Metgasco chief executive Peter Henderson claims opposition to gas mining is driven by a core group of "professional protesters".

"They're the people who tend to be the mainstays, quite often the troublemakers ... they are basically anarchists," he said. "When the television cameras come they tend to get to the back and they push a local farmer to the front."

But Environmental Defenders Office principal solicitor Sue Higginson said local opposition to mining projects, including from farmers, was genuine.

"We are seeing 75-year-old blokes standing locked on to machinery for nine hours after getting up at 3am to make a difference, to try to be heard by a system they believe is not listening," she said.

Excerpts from Police should have stepped in at Bentley sooner: Metgasco* in The Northern Star, 14 August 2014:

* POLICE should have intervened at Bentley before the situation escalated to a crisis point where 800 officers were needed, Metgasco CEO Peter Henderson said.

Mr Henderson was commenting on government documents released last week describing the unprecedented tactics used by activists and the "high to extreme" risk to the public and police of any confrontation.

In hindsight, he said the best time for police to act was when protesters had first established a presence outside the proposed drilling site in January….

* The company had asked police to "go in early" and arrest protesters breaking the law, given Metgasco's past experience at previous blockades at Doubtful Creek and Glenugie…

* Seventeen online reader comments under this article

NSW Government Trade & Investment PEL 16 map showing the number and location of Metgasco exploration wells: