“The grounds for Metgasco’s claim are that the decision was unlawful because it was not authorised by legislation, and was made without affording Metgasco procedural fairness,” the company said.
“Furthermore, the Minister has claimed that he exercised his power to suspend because of Metgasco’s alleged failure to engage in community consultation.”
The company will argue that it complied with community consultation obligations, meaning the government should not have used its powers to suspend drilling.
Metgasco is making a claim for damages for the company’s losses from the suspension of its drilling approval.
Late last year, Metgasco confirmed plans to drill the conventional well after the company's coalbed methane operations were stalled because of government legislation.
When Metgasco first revealed plans to drill the well, managing director Peter Henderson said the announcement reflected positive “regulatory and political” developments.
“Six months ago, Metgasco suspended field operations when the NSW government announced major changes to regulatory and administrative procedures,” he said at the time.
“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.”