Question for 2013: So exactly when is the Australian National University going to become an ethical investor?

In January 2013 local and national media reported that the Australian National University (ANU) was still a significant shareholder in Metgasco Limited, a coal seam gas exploration and production company operating without a social license on the NSW North Coast.

When caught out ANU pleaded that there were few buyers for Metgasco shares.

To date there has been no announcement that ANU has divested itself of the 2,500,000 Metgasco shares it held as of September 2012.

So how genuine is the University when it comes to ethical investment?

After a Student Union campaign, on Tuesday 11th October 2011 ANU's vice-chancellor Professor Ian Young announced the university investment fund would sell-off $1 million worth of Metgasco shares.

The next day Professor Young stated; We've had those shares since 2001…. They represent less than 0.1 per cent of our total investment portfolio.

However, share movement indicates normal investment trading from 2004-2012, rather than any desire on the university’s part to divest itself of all Metgasco shares from October 2011 onwards.

For interested readers – here is a brief history of ANU shareholdings according to Metgasco company documents:

Between 2004-2006 the Australian National University is not on Metgasco’s 20 Largest Shareholders list.

Metgasco Annual Report 2007

“Metgasco completed two private placements and a Share Purchase Plan during the year.

The Share Purchase Plan was strongly subscribed with over 70% of shareholders taking up their rights to participate.”

The Australian National University Investment Section - 1,250,000 shares representing 1.03% of all issued Metgasco shares as of 31 August 2007.

Making it the 14^th largest shareholder.

ANU holdings increased by an unquantified number of shares.

Metgasco Annual Report 2008

The Australian National University - 2,712,000 shares representing 2.05% of issued Metgasco shares as of 17 September 2008.

Making it the 11^th largest shareholder.

ANU holding increased by 1,462,000 shares.

Metgasco Annual Report 2009

The Australian National University - 2,500,000 shares held representing 1.34% of issued Metgasco shares as of 15 September 2009.

Making it the 11^th largest shareholder.

ANU apparently divested itself of 212,000 shares

Metgasco Annual Report 2010

The Australian National University - 2,283,333 shares representing 0.91% of issued Metgasco shares as of 22 September 2010.

Making it the 12^th largest shareholder.

Apparently ANU divested itself of 216,667 shares.

Metgasco Annual Report 2011

On 17 June 2011 “the Company launched a Share Purchase Plan (“SPP”)….

In mid-2011 we raised new capital of $21 million via a targeted placement and a Share Placement Plan for existing shareholders….”

The Australian National University - 4,206,409 shares representing 1.25% of issued Metgasco shares as of 16 September 2011.

Making it the 10^th largest shareholder.

ANU holding increased by 1,923,076 shares.

NOTE: On Tuesday 11 October 2011 ANU informed the Students Association that it was intending to sell an estimated $1million worth of Metgasco shares, after a campaign by students which one would presume occurred over a number of weeks or months.

Metgasco Annual Report 2012

The Australian National University - 2,500,000 shares representing 0.64% of issued Metgasco shares as of 21 September 2012.

Making it the 17^th largest shareholder.

ANU apparently divested itself of 1,706,409 shares.

ANU’s current total number of Metgasco shares held is now the same as its September 2009 total.
 

UPDATE:

ANU Environment Collective

 

Further Update

The Daily Examiner 26 February 2013:

A GROUP of students is claiming victory today after learning the Australian National University sold its remaining shares in gas mining company Metgasco.

Vice-Chancellor Ian Young sent an email to ANU Environment Collective spokesman Tom Swann this morning revealing the shares had been sold.

"I am informed by the ANU Investment Office that the university has now divested itself of all shares in Metgasco," Mr Young's email read.

APN Newsdesk has contacted ANU seeking confirmation about the sale and answers to other questions.

Mr Swann said the EC campaign to have ANU sell its shares in Metgasco began two years ago after the group was contacted by activists in areas where Metgasco was mining…..

Metgasco shareholders are revolting

Northern Rivers communities having contact with Metgasco Limited have come to understand that this coal seam gas exploration and company mining is not a good corporate citizen and, that it is often a stranger to the truth in its dealings with both local residents and media.

It has been a long time coming but finally larger shareholders are noticing what smaller shareholders appear to have known for some time - that the Metgasco board is all talk and no walk.

http://www.asx.com.au/asxpdf/20130930/pdf/42jprppqc9wrj8.pdf

The Letter to Shareholders* mentioned in Metgasco Limited's advice to the Australian Stock Exchange:

27 September 2013
The Shareholders Metgasco Limited
Dear Fellow Shareholders
Over the past months a number of significant shareholders in Metgasco Ltd (the “Company” or “Metgasco”) have expressed their disappointment in the performance of our Company to the CEO and Board of Metgasco. This group of shareholders includes the founders of the Company, shareholders who have supported the Company since listing in December 2004, shareholders located in the Northern Rivers region and proposed local gas customers of Metgasco.
Over the past two and a half years two highly dilutive capital raisings have been undertaken and almost 200 million new shares have been issued. These capital raisings at historically low prices have diluted shareholders of the company by over 50%. No tangible progress has been made by the Company with the proceeds from these capital raisings despite over $27 million being spent by the Company in this period. Most recently (25 July 2013) the Board of the Company decided to reward this performance by the issue of over 10 million shares to employees at a price 20% below the current trading price of the shares.
This group of shareholders has supported the Company through difficult circumstances. However, activist opposition and government dithering does not excuse the Company’s total lack of direction, high spending levels, inadequate planning and an inability to communicate with shareholders.
This group of fellow shareholders is very concerned that there is no strategy for the Company going forward evidenced by the confused letter sent to shareholders by the Company dated 9 September 2013.
Today these shareholders have given notice to the Company of resolutions that they propose to move at the next general meeting of Metgasco and have requested that a meeting be convened by Metgasco to consider these resolutions.
The Proposing Shareholders have nominated three directors to the Board of Metgasco with the intention of ensuring that the strategy of the Company is re-directed towards improving the performance of Metgasco so as to enhance its share price. The interests of the Proposing Shareholders are wholly aligned with other shareholders of the Company which is to ensure that Metgasco achieves its full potential. We do not represent the interests of any other corporate third party.
At the forthcoming general meeting the Proposing Shareholders intend to vote in the following manner.
• The Proposing Shareholders will not support the re-election of Mr Nicholas Heath.
• The Proposing Shareholders will not support the election of Mr Greg Short.
• The Proposing Shareholders will not support the Remuneration Report.
• The Proposing Shareholders will not support the award of shares for the performance of Mr Peter Henderson in his role as Managing Director.
The Proposing Shareholders seek the election to the Board of the following:
• Ms Glenda McLoughlin
• Mr Michael O’Brien
• Mr Stuart Glenn
Summary biographies of these nominees are attached.
Metgasco needs to be focussed and determined at the Board level. The Proposing Shareholders expect that a refreshed Board will ensure enhanced financial discipline and re-focus the efforts of the Company on its core strengths.
We urge you to support this initiative to revitalise the Board of Metgasco.
Yours faithfully
John Vaughan
On behalf of the Proposing Shareholder Group

Metgasco Limited 2013 Annual Report here.

*Northern Rivers residents may recall Byron Bay residents Mr. Vaughan as a letter to the editor writer and online commenter in defence of Metgasco and the coal seam gas industry.

UPDATE

In an obvious effort to stem the shareholder revolt and butress its weak share price, Metgasco Limited issued this media release on 2 October 2013:

METGASCO PLANS TO RECOMMENCE GAS EXPLORATION IN NORTHERN RIVERS NSW

2 October 2013

Metgasco (ASX: MEL) today advises the following:

Metgasco Limited (ASX: MEL) is pleased to announce today that it is initiating plans to recommence gas exploration. The company plans to drill the Rosella-1 conventional gas well in its exploration permit PEL 16 located in the Northern Rivers region of NSW.

Commenting on developments, Metgasco’s Managing Director, Peter Henderson, said that today’s announcement reflects positive regulatory and political developments.

“Six months ago, Metgasco suspended field operations when the NSW government announced major changes to regulatory and administrative procedures. Like Metgasco, major industry players also chose to suspend activity in NSW at that time. However, recent regulatory and political developments, particularly since the September Federal election, have encouraged Metgasco to initiate the activities necessary to enable field operations to recommence”, added Mr Henderson.

Metgasco participated in the successful NSW Energy Security Summit on 26 September 2013, at which the serious gas shortages facing NSW consumers over the coming years were given extensive media coverage. Major energy users, farming community representatives and other stakeholders joined gas explorers and producers in reviewing the very disturbing forecasts of steep gas price increases in all eastern states.

There was strong acknowledgement at the summit by key stakeholders that price increases and potential gas shortages could only be mitigated by additional supplies of gas. In particular, the NSW Resources and Energy Minister, the Hon Chris Hartcher MP, expressed support for NSW gas explorers to pursue new gas supply sources to help moderate the inevitable gas price increases faced by NSW gas consumers. He also made clear to stakeholders that the NSW government’s tight environmental requirements were to remain.

In order to successfully complete exploration drilling, Metgasco will be working with the regulators and conducting a community consultation program to ensure that environmental concerns are addressed and the environmental objectives of the NSW government’s regulatory regime are satisfied, and the community is aware of the Company’s operations.

Following the recent Federal election, the new Federal Industry Minister, the Hon Ian Macfarlane MP, has initiated processes to facilitate dialogue between gas explorers and farming groups in order to bring about a resumption of gas exploration and development in NSW. This work is greatly valued. Mr Macfarlane is supportive of the gas industry and is working to harmonise and simplify regulations across state and federal boundaries. Metgasco strongly supports the need for smart regulation based on sound science.

For over 10 years Metgasco has operated successfully in the Northern Rivers region and has enjoyed the strong support of the majority of landholders and community members with whom the Company works. Over this period, 300 landholder agreements have been put in place, and over 50 wells drilled. Polls conducted by the Richmond Valley Council also show community support for the natural gas industry.

The Rosella-1 exploration well is to be drilled to a proposed total depth of 2,100m on a site 12 km to the northeast of Casino. The well is a commercially high risk well that will test the non-CSG, conventional gas potential of the Greater Mackellar structure. The prospect is interpreted to cover an area of 260 km² and hold a potential mean volume of 1,304 BCF of gas in place, comprising an estimated 456 BCF in the Ripley Road sandstone and 848 BCF in the Gatton sandstone. The primary objective is the Ripley Road sandstone which was tested in Kingfisher-1 at an initial rate of 3MMcf/d. The well will also test the thick sequence of gas bearing strata in the Gatton sandstone which had low permeability in Kingfisher-1, together with the deeper Basal Bundamba Sandstone (a lateral equivalent to the Laytons Range Conglomerate), Ipswich and Nymboida Coal Measures which were below the total depth reached in Kingfisher-1.

If successful in encountering gas, it is likely the well will be tested to assess gas production potential. Metgasco does not currently plan to conduct hydraulic fracturing of the well. However, in the event that it is later determined that hydraulic fracturing has the potential to increase the economic potential of the well, provision will be made for later well re-entry and fracture stimulation. This would be similar to the Kingfisher-1 discovery well where a limited 3m interval was fractured to stimulate gas flow in 2010.

The Company is committing to carry out the preparatory work over the coming months. A final commitment to drill the well is to be made when a suitable drilling rig has been identified, regulatory permits are in hand, and discussions with key stakeholders have taken place. There must also be a continuing expectation that the regulatory and political environment will continue to improve, providing stability and support. With confidence restored, the support of key stakeholders and the timely receipt of approvals, it is anticipated that the well will be drilled in the first half of 2014, depending on rig availability.

About Metgasco

The Natural Gas Company - Metgasco Limited

Our business is about finding, producing, marketing and delivering gas from natural gas reserves.  We are a natural gas company that is focused on developing the coal seam gas and conventionally trapped gas resources of the New South Wales Clarence Moreton basin. 

We have established a large natural gas reserve base and are in the process of converting our gas reserves into gas supplies delivered to customers.  Metgasco has grown its reserve base at a very low cost relative to other companies.  Our finding cost per gigajoule of 2P reserves is amongst the lowest in Australia.  This provides the basis for shareholder value creation in the future.

Michele Perry

Metgasco Limited Direct: +61 2 9923 9124

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:

Metgasco spinning in all directions on the subject of fracking coal seam gas on the NSW North Coast

Metgasco Ltd whose coal seam mining operating licences cover approximately 5,800 km² in the New South Wales section of the Clarence-Morton Basin is having a little trouble deciding which line to spin North Coast communities and their elected representatives………

Fracturing, or ‘fracing’ as it is referred to in the CSM industry, is a technique used to improve the flow of gas from the coal seam. It is not anticipated at this time that fracing will be required; however information on typical fracing impacts and management has been provided in case this should change in the future. The main impacts are associated with an increase in noise from the high pressure pumps during the fracing operation and the potential for cross contamination of beneficial use aquifers in the adjacent area.[Metgasco Ltd Environmental Assessment - RVPS & CGP: Executive Summary, August 2008]

Metgasco told the government its drilling would have little effect on aquifers since all wells are encased in cemented steel casing ''so there is no perceivable impact to ground water [as] a result of the fracture treatment'' [Metgasco spokesperson in The Sydney Morning Herald, Gas drilling goes ahead without any checks, 15 November 2010]

Metgasco takes its environmental responsibilities very seriously and is open and transparent in its activities [Metgasco Managing Director David Johnson, in The Sydney Morning Herald, letter to the editor, 24 November 2010]

The final investment decision on into production through stimulation techniques such as this project remains subject to satisfactory progress on fracture stimulation [Metgasco 2010 Annual Report]

Metgasco, had been given a licence to mine using the controversial hydraulic fracturing technique, also known as “fracking”….this method of extracting natural gas from coal seams involved pumping material that often including poisonous or carcinogenic materials into the rock to create fractures that allowed the gas to escape [Education officer for the Environmental Defenders Office NSW Northern Rivers Mark Byrne in The Daily Examiner, Poison warning as gas mining starts, 25 January 2011]

Locally Metgasco have given assurances that they don’t use any chemicals, and don’t do fracking [Steve Cansdell NSW MP for Clarence in The Northern Rivers Echo,Gas seams to be a cloudy issue, 24 February 2011]

the company had done one hydraulic fracture in the Northern Rivers region, at the Kingfisher site near Casino…. We’re happy to give a list of chemicals, the names aren’t generally recognisable but they’re all relatively common chemicals; every one of the chemicals will be in most people’s houses,….The Kingfisher frack was done at 1450m [Metgasco’s chief operating officer Mick O’Brien in The Northern Rivers Echo, Metgasco goes deep into CSG, 3 March 2011]

the company did not use hydraulic fracturing…..nor poisonous chemicals in the well-drilling process [Metgasco’s chief financial officer Glenda McLoughlin in The Northern Star, Metgasco spruiks its transparency, 16 March 2011]

we don’t use fracking in coal seam gas exploration [Metgasco operations manager Aidan Stewart in The Northern Rivers Echo, Gas meeting fails to fire, 17 March 2011]

Metgasco tell us they are not using this process [Janelle Saffin Federal MP for Page, media release, 16 May 2011]

Metgasco applies advanced drilling and production techniques to extract coal seam gas. We produce gas from certain seams by drilling a vertical well to between 300 to 700 metres from the surface. The well is then cased to prevent any water from upper acquifers leaking into the well. We then drill horizontally along the coal seam to a distance of up to 1,000 metres. The well is then lined with perforated steel casing. Water and gas are then pumped from the well and separated at the well head. This process of taking water out of the coal seams lowers the pressure in the well and allows gas to flow to the wellhead. [Metgasco website, 17 May 2011]

Metgasco Limited reaps that which it sowed - PEL 16 operations suspension continues

Metgasco Limited finds itself friendless – with all seven Northern Rivers local government councils having put their concerns and/or outright opposition on the public record and, the NSW Government standing by its decision to suspend operations at the company’s PEL 16 Rosella E01 Bentley gas exploration well.

_____________________________________________

The Hon Anthony Roberts MP

Minister for Resources and Energy

Special Minister of State

MEDIA RELEASE

Thursday 26 June 2014

STATEMENT ON METGASCO

As requested by Metgasco, a review of the Office of Coal Seam Gas (OCSG) decision to suspend operations of Metgasco under the Activity Approval has been undertaken.

Metgasco was provided with opportunities to submit additional material to be taken into account in relation to this review.

Metgasco took the opportunity to submit additional material during the course of the review which has been taken into account.

The outcome of the review is that the decision to suspend the operations of Metgasco under the Activity Approval remains in place until the OCSG is satisfied that the company

has met the conditions of its title and the conditions of the Activity Approval.

An Executive Summary of the reasons will be published by the OCSG on its website in due course at: www.csg.nsw.gov.au

As this matter remains the subject of ongoing litigation, I will be making no further comment.

_____________________________________________

Statements on Metgasco

Metgasco - petroleum exploration licence 16

Status of Rosella exploration well activity approval

26 June 2014

The decision to suspend the operations of Metgasco under the Activity Approval remains in place until the Office Of Coal Seam Gas is satisfied that the company has met the conditions of its title and the conditions of the Activity Approval. Read the decision here.

14 May 2014

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).

Metgasco Ltd wrote to the OCSG on 15 May 2014 requesting that the OCSG review its decision of 14 May 2014.

Metgasco provided the OCSG with additional material about its community consultation activities for the proposed drilling of the Rosella Exploration Well to consider as part of the review.

OCSG met with Metgasco on 16 May 2014 to discuss the regulator's decision of 14 May 2014 and the company's submission.

The OCSG has reviewed this additional material. At this stage, the decision of 14 May 2014 still stands, given the company has not effectively and genuinely engaged with the community or put in place an appropriate community consultation plan in accordance with the Guideline for community consultation requirements for exploration ("the Guideline").

OCSG has informed Metgasco of this and given the company a further 10 days to make any further submissions. A final decision on review will be made following full consideration of any further submissions.

The OCSG has maintained an ongoing dialogue with Metgasco in relation to this matter.

Compliance with Community Consultation Condition

Community consultation and engagement is a key element of the regulatory framework for petroleum exploration projects in NSW.

This is reflected in the imposition of a specific condition on petroleum exploration licences (PELs) issued under the Petroleum (Onshore) Act 1991 (the Act). The conditions make it mandatory for petroleum exploration licence holders to "engage with the community in relation to the planning for and conduct of prospecting operations". This condition is supported by a guideline: Guideline for community consultation requirements for exploration (the Guideline).

In addition, licence holders must report on compliance with the above condition annually.

The OCSG acknowledges that some sections of the community are opposed to the development of a gas industry for a variety reasons. We do not expect licence holders such as Metgasco to be able to change their view points.

We do however expect that licence holders such as Metgasco will develop a detailed consultation plan in compliance with the Guideline and demonstrate an ability to effectively and genuinely engage with the community.

The plan should be appropriate to the circumstances of the case and include a detailed analysis of stakeholder groups in the Richmond Valley, Kyogle Shire and Lismore City Council areas.

The OCSG has advised Metgasco that works could be recommenced under the activity approval once an acceptable community consultation plan is in place and the company demonstrates an ability to appropriately engage with the community, in compliance with relevant obligations under PEL 16.

Australian expert in community engagement tells Metgasco CEO "he's dreaming"

Gasfield  Free Northern Rivers Media Release, 22 July 2014 :

Senior Australian expert in community engagement tells Metgasco CEO “he’s dreaming”

Senior Australian expert in community engagement tells Metgasco CEO “he’s dreaming”

A senior expert in community engagement, Dr Wendy Sarkissian PhD, has analysed Metgsco’s community engagement policy and come to the conclusion that it is severely flawed and insufficient for Metgasco gaining a social licence to operate in the Northern Rivers.

“As a senior expert experienced in community engagement, I find Metgaso’s Community Relations Policy severely lacking in the fundamentals for successful community engagement. It is laughable that Metgasco’s ‘Community Consultative’ policy was removed from its website a few days after I advised that it was written in Latin,” said community engagement expert, Dr Wendy Sarkissian

“The field of community engagement is well developed, so it is appalling to think that as an ASX listed company, Metgasco is trying to pass off its policy as world’s best practice. While it may be comparable to other gas company’s engagement policies, it is a damning indictment of industry practices if Metgasco thinks providing one-way information and ignoring community concerns amounts to world’s best practice,”

“Marketing and providing information by itself does not amount to community consultation. Community consultation is a two way street that actually involves a dialogue with the community. This involves listening to the community and responding to concerns, clearly something Metgasco has failed to do,”

“Metgasco’s narrow approach to only notify stakeholders living within 2 km of the proposed Rosella drill site ignores the wider impacts invasive gas drilling has on communities and the environment. This unsophisticated and misguided engagement process attempts to ‘contain’ the discussion which means those outside the 2 km are not deemed worthy of consideration. This is a damning indictment of Metgasco’s attitude to the broader community and environment,”

“Metgasco’s CEO Peter Henderson has said previously that it needs a ‘social licence’ to operate and that it would not go where it has no community support. The thousands of people who attended the Bentley Blockade, as well as previous blockades at Glenugie and Doubtful Creek, clearly demonstrate that Metgasco has no social licence. The fact that Metgasco’s licence to drill at Bentley was suspended by the government on the grounds of ‘inadequate community consultation’ attests to this fact,”

“I’d be delighted to speak to the Metgasco board and explain what authentic community engagement looks like. As an expert in this field, I can only reiterate that Metgasco’s dreaming if it thinks it can force itself into the Northern Rivers without genuinely engaging with the community,” concluded Dr Sarkissian.

Wendy Sarkissian 0402 966 284

Reasons given by the NSW Office of Coal Seam Gas for the suspension of Metgasco Limited's drilling activities at Bentley

Excerpt from the NSW Office of Coal Seam Gas Executive Summary: Reasons for Metgasco Review Decision 26 June 2014:

The Director decided to confirm the suspension of Metgasco's activities because, in her opinion:

● Metgasco had not developed a community consultation plan in accordance with the Guideline. This was not to say that Metgasco was not undertaking community consultation, but there was no evidence of a plan as required by the Guideline and by condition 8 of Schedule 2 of PEL 16.

● Metgasco had not adequately identified relevant stakeholders. Metgasco's consultation efforts had been limited to landholders within 2km of the proposed Rosella Exploration Well, the Richmond River Council, local indigenous groups, and the general community. However, the Director considered that Lismore and Kyogle Councils also had a significant interest in the activities being undertaken by Metgasco and should have been engaged as proactively as Richmond Valley Council. Further, the Director was not satisfied that Metgasco had undertaken an appropriately detailed analysis of the stakeholders given the circumstances of the case such as local environment groups, chambers of commerce or other interested community groups. Although the consultation undertaken by Metgasco was active, it was too narrow and the identification of stakeholders was inadequate. Metgasco limited its focus to an area and people that it thought it could positively influence. This was considered to be contrary to the Guideline and accordingly condition 8 of Schedule 2 of PEL 16.

● the consultation undertaken by Metgasco had not been effective. The Director considered that Metgasco could take a significantly more sophisticated approach to community engagement than it had done.

● Metgasco's decision to defer a broader consultation program until after the Rosella Exploration Well had been drilled was not reasonable given the escalation of opposition to the activity in the Northern Rivers area from the beginning of the year.

The Director considered that Metgasco needs to develop a clear and sophisticated community consultation plan to deal with community consultation in the complex community operating environment of PEL 16.

In her reasons, the Director reiterated the offer of support which the Division of Resources and Energy, the OCSG and the Land and Water Commissioner is able to provide in this respect.

Coal seam and tight gas miner Metgasco Limited sets out on a deliberate collision course with Northern Rivers communities yet again

Coal seam and tight gas miner Metgasco Limited sets out on a deliberate collision course with Northern Rivers communities yet again and, just as before, it intends to drag the NSW Government and police along for the ride.

The Sydney Morning Herald 24 April 2015:

Energy company Metgasco says it will need police to escort gas drilling equipment onto its site on the NSW north coast following a court victory overturning a suspension imposed on it by the state government.

Chief executive Peter Henderson said protesters would return to the site at Bentley once the company seeks to start drilling in about three months' time.

"When we drill now we know there are going to be protesters and we will need police in there to uphold our rights," he said.

"Otherwise NSW will be the state of anarchy."….. [my red bolding]

The Northern Star 24 April 2015:

PROTESTERS will continue to fight Metgasco at Bentley even if the State Government passes legislation banning protests at drilling sites, Ian Gaillard says.

Mr Gaillard, of Gasfield Free Northern Rivers, said locals would not allow Metgasco to start drilling at Bentley and called on the State Government to revoke all gas licences…..

Clarence MP Chris Gulaptis has also expressed his unhappiness with the decision.

"I am extremely disappointed with the decision of the NSW Supreme Court to quash the decision of the NSW Government to suspend Metgasco's drilling licence at Bentley," Mr Gulaptis said.

"I will be urging the Minister to seek every opportunity to appeal this decision because I believe it is wrong."….

Federal Member for Page Kevin Hogan says it would be "foolish" for Metgasco to consider returning to the region, adding the legal avenues over their licence suspension are far from exhausted.
Mr Hogan said he had been in touch with state colleagues who were already in talks with Resources and Energy Minister Anthony Roberts about grounds for an appeal. He said he was "extremely disappointed" by the news.
"We do not want CSG in the Northern Rivers and we need to do everything we can to make sure that is what happens.
"This isn't over, while they may be feel happy with the decision today, I don't think it's over legally and it's certainly not over as far as them coming back into our community to do what they want to do."
Mr Hogan added it would be "quite foolish" for Metgasco to consider returning to Bentley in the near future.
"I think this community has shown very strongly that they do not want coal-seam gas in this region," he said.
"While they have won this court case, there are still legal options for the state government to take, and the first one would be an appeal.
"I think the suspension should remain until that appeal is heard."

 Lismore City Mayor Jenny Dowell on Twitter:

Excerpt from NSW Greens media release 24 April 2015:

Greens Member for Ballina Tamara Smith said, “Despite the court victory, Metgasco should heed the clear message from the community that they want a gas field free Northern Rivers.  Metgasco should pack up and leave. “If Metgasco try to drill again, the community will resist and I will be standing with them.

The Knitting Nannas Against Gas (KNAG) on Facebook, 25 April 2015:

Excerpt from an editorial in The Northern Star, 25 April 2015:

If past history is anything to go by, protesters will likely be setting up camp at Bentley in the very near future.

So are we back to square one on this issue? Or has the government's election results on the Northern Rivers taught them any lessons?

Considering the government trumpeted its buy back of CSG licences during the last election campaign, perhaps they should extend it to the licence that covers Bentley.

Otherwise we are in for more of the same.

Another blockade at Bentley and the government forced to make the difficult decision of sending hundreds of police officers north, at taxpayers' expense, to remove thousands of protesters.

The NSW Supreme Court has delivered a sharp rebuke to the government which is going to cost them a lot of money.

But the circumstances that led them to the suspension still remain.

Comments published in The Northern Star on 25 April 2015:

Lynne Stebbing: There is going to be trouble!

Hugh Nicholson: This decision only relates to the way the government went about suspending Metgasco's license.

It has nothing to do with the reason for the suspension - namely Metgasco's failure to consult with the community. Go away Metgasco.

From Land Water Future tweet on 24 April 2015:

UPDATE

The Northern Star 27 April 2015:

Bentley landowners Meg and Peter Nielsen believe that if energy company Metgasco returns to the region public resistance will be even stronger than it was at last year's blockade.

"It will be on for young and old," Mr Nielsen declared.

"Our resolve will never turn. Metgasco would be absolutely foolish to try it again."

But the couple believes the NSW Government will "see common sense" before it comes to that.