METGASCO has pledged to proceed to the next stage of a court challenge to the New South Wales Government’s suspension of its approval to drill the Rosella exploration well.
The NSW Office of Coal Seam Gas (OCSG) suspended the licence on 14 May, citing inadequate consultation with the community of Bentley, where the well is located.
Metgasco chief executive Peter Henderson said the most recent government response to its claims included no “surprises or significantly new information.”
“Metgasco strongly believes that it has complied with the Government’s guideline on community consultation,” he said.
“The Company’s proposed consultation program was specified in its drilling REF (environmental) application lodged in March 2013 and approved by the Office of Coal Seam Gas (OCSG) in February 2014.”
“The OCSG did not communicate any concerns about community consultation until a few days before the drilling rig was to be mobilised,” Mr Henderson said.
Mr Henderson said he believed the OCSG was changing its rules.
“In justifying the suspension it incorrectly confuses and conflates ‘consultation’ with ‘persuasion’,” he said.
“Genuine and effective community consultation does not and cannot demand that everybody in the community agrees with the proposed activity, particularly if the community is taken to include people living in a very wide region and activist protesters, many of whom have travelled from other states,” he said.
“If this is a ‘new standard’ to be adopted, new mines, dams, motorways, railways and airports will struggle to be built in NSW.”
He revealed that the court had agreed to expedite the hearing, with the first available date for the hearing likely to occur after October.
In the meantime, the company was rationalising costs and cutting its staff numbers as it grapples with a financial loss of $3 million and a steep drop in its share price as a result of the decision, Metgasco chairman Len Gill said in a letter to shareholders.
“Metgasco continues to have a focus on conserving cash, particularly given the legal and associated expenses which have unexpectedly arisen,” he said.
“Staff numbers have been further reduced and other costs rationalised.”
While the company remains confident that gas development in its exploration licence areas can have a positive impact on the Northern Rivers of NSW, the latest setback has prompted the company to scope out other opportunities.
“Given the delays and uncertainties in NSW, we will also be considering opportunities outside the Northern Rivers that complement our ability to recover value from the Northern Rivers resource,” Mr Gill said.
The company has also warned on the wider ramification’s the decision will likely have on the State’s gas industry.
“The OCSG’s new interpretation is likely to have significant implications for resource and infrastructure projects across the state,” Mr Gill said.
“This is at a time when there are gas shortages looming and substantial gas price increases to industries and consumers are expected.”
Metgasco has witnessed a decline in its share price of about 40 per cent following the suspension decision. The company last traded at 5c on 18 July.