Coal-seam gas miner Metgasco posted a $5 million loss at its AGM yesterday, the second in as many years.
The loss came as no surprise to CEO Peter Henderson, who explained that the company was still in the prospecting phase and so far had no gas to sell.
But he says that situation will soon change, following the granting of the company’s first production licence and what Mr Henderson described as ‘successful’ seismic testing in recent weeks.
Mr Henderson says that as a result of the testing, the company plans to drill three production wells near Casino in coming months, with an optimistic deadline of ‘early December’ to start producing gas.
Metgasco predicts gas sales nearing $4 million next financial year and upwards of $7 million the following.
But Mr Henderson remained coy on particular details of any deals and sales, saying they were subject to ‘commercial-in-confidence negotiations’.
So far Metgasco has variously proposed local gas sales in Casino, a pipeline through world-heritage wilderness to join up with southeast Queensland gas production, and/or a pipeline to a seaport at Byron Bay or Ballina.
No concrete plans for any of the proposals have so far been released.
At least one news report this week has hinted that the company is preparing itself for an early sale, quoting analysts as suggesting the share price understates its value.
Baillieu Research set a price target for the company at 62 cents per share and expects its share price to increase by 10 to 12 per cent in the next year.
Metgasco shares closed unchanged at 20 cents yesterday.
So Mr Henderson has an “optimistic deadline of early December” to start producing gas? I think “optimistic” is the understatement of the year!
One can only hope that the recent research by SCU into fugitive methane emissions will ring some warning bells somewhere, if not in the industry, then perhaps in government, and that the “optimism” will be replaced by realism Corporate Social Responsibility!