Metgasco is a petroleum (oil and gas) exploration and production company, listed on the Australian Stock Exchange (MEL). Our business is finding, producing, marketing and delivering oil and gas from natural oil and gas reserves, both conventional and unconventional.
Since listing in 2004, Metgasco has concentrated its exploration efforts in the Clarence Moreton Basin, in the north east corner of New South Wales. We currently have three exploration licences in this basin, PEL 13, PEL 16 and PEL 426. Our major focus has been on coal seam gas, but we have also identified significant tight and conventional gas potential in the basin.
We have acquired about 400 km of 2D seismic and have drilled approximately 50 wells to define the coal seam gas reserves. We have been successful in establishing a large natural gas reserve base from coal seams in the exploration licences (approximately 400 bcf of certified 2P reserves and 2,500 bcf of 3P reserves)* and have identified an exciting conventional and tight gas prospect following the drilling of Kingfisher E01.
Our aim is to supply the gas to local industry in the north east corner of NSW before supplying gas to the broader eastern coast energy market and possibly the export LNG market. Metgasco is well positioned given that it is generally accepted that a shortage of gas is imminent on the eastern coast of Australia and that NSW’s contracted gas shortages are likely after 2016. Gas prices are expected to be driven to close to export parity levels.
In March 2013, Metgasco suspended its Clarence Moreton Basin field operations because of uncertainty related to NSW government support and regulations. In particular, the NSW Government introduced a 2 km exclusion zone without any industry consultation, reducing Metgasco's reserves, and announced changes to responsibilities amongst Government agencies.
In September 2013, following strong support from the newly elected federal government for a NSW gas industry, Metgasco announced that it would recommence field activity with the drilling of an exploration well (Rosella) targeting a large conventional gas prospect, the Greater Mackellar structure. The final regulatory approval was obtained in February 2014 and commitments were made with drilling service companies with the intention of drilling the well in the 2Q 2014. In mid-May 2014, only days before the drilling rig was to arrive on site, the NSW Government suspended Metgasco's right to drill the well, an action it took without providing any notice and on the basis that Metgasco had failed to consult adequately with the community.
Metgasco challenged this but was not able to have Government reverse the suspension decision. As a consequence, Metgasco took action in the NSW Supreme Court to have the suspension lifted. In April 2015 the NSW Supreme Court found in favor of Metgasco on all of the three major grounds, lifting the suspension.
Metgasco is now planning to restart field activity, and is seeking damages from the NSW Government for the unlawful 2014 suspension.
Metgasco is also currently reviewing a range of oil and gas exploration and development opportunities outside the Clarence Moreton Basin.
* reserves reclassified as resources in 2014 due to concerns about the NSW political environment and project delay potential.