Metgasco has hope for Rosella

Chairman Len Gill

Australia’s natural gas producer Metgasco is ready to start drilling its controversial Rosella-1 well, expecting a court decision to go in its favour.

On 4 July, Metgasco appeared in the New South Wales Supreme Court to plead its case in the ongoing battle between the company and state regulators, which earlier this year blocked drilling of the conventional well.

According to chairman Len Gill, the court agreed to expedite the hearing, with the first available date expected to be some time in October.

“Metgasco expects the Court to overturn the suspension decision,” he said.

“It is our intention to resume drilling of the Rosella conventional well as soon as practicable after this time.”

He added that the company was looking to the NSW government to guarantee that anything deemed as lawful activity would be “supported and protected”.

“Metgasco continues to investigate all options, including whether it may have a claim for damages. “Whether such a claim is available may not become clear until after the judicial review proceedings have been determined.”

He said that on top of earlier staff and cost cuts that took place late last year, another round of cutbacks had taken place.

A spokeswoman for the company could not confirm to Upstream the number of jobs that had gone at the company.

The ordeal has cost Metgasco about $3 million and wiped 40% off the value of the company’s share price.

The NSW Office of Coal Seam Gas told Metgasco to suspend all operations until the company can “demonstrate...[it] has complied with condition eight of the PEL 16 exploration licence regarding community consultation”.

The office gave Metgasco written material on the decision to renew the suspension stating it had changed its interpretation of “effective consultation” with stakeholders.

Metgasco believes the new interpretation “does not accord with its own guidelines”.

The company believes the office has no justifiable basis for renewing the suspension, stating it believed it lived up to its community consultation obligations.

Gill said the company had made extensive efforts to prove the well was up to standard.

“The program of consultation for the single Rosella conventional gas exploration well was more comprehensive than previous consultation activities for similar activities.

“The OCSG was given a copy of the Rosella consultation plan as part of the drilling environmental application submitted in March 2013 and was approved by the OCSG in February 2014.

“The OCSG made no comment on the consultation plan, nor did it provide any feedback on consultation plans in general until its 14 May suspension decision.”

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