Metgasco will not know until October, at the earliest, whether it can convince the Supreme Court to overturn the state government’s suspension of its Bentley gas exploration licence.
Last Friday (July 4), Metgasco appeared in the NSW Supreme Court to again request a judicial review of the decision made by the Office of Coal Seam Gas (OCSG), which suspended the licence in May on the grounds of inadequate consultation.
The company mothballed its initial court hearing after the government agreed to expedite an OSCG investigation into the suspension.
On June 26 OSCG released its report upholding the suspension on the grounds of inadequate community consultation.
The company said yesterday that while the court has agreed to Metgasco’s request to expedite the hearing, ‘due to existing court commitments, the first available date for the hearing is likely to be no earlier than October.’
Company chairman Les Gill said the decision to take court action ‘has not been taken lightly, but with significant shareholders’ funds invested in exploring in the northern rivers gas resources, Metgasco has no other choice.’
Metgasco wrote to its shareholders yesterday saying the suspension was on grounds the company considered to be spurious, ‘that we had failed to undertake “effective consultation” and that our consultation contained an alleged “mischaracterisation” of the planned Rosella well.’
The letter, signed by Mr Gill, claimed the NSW government had ‘already caused a financial loss in the order of $3 million to the company, in addition to causing an approximate 40 per cent reduction in share price.’
‘The prime reasons for the suspension decision appear to have little to do with Metgasco’s efforts to consult in good faith with the local community,’ the letter reads, ‘but rather a concern about protests by activists who demonstrably have no interest in consultation.
‘The new OCSG position has no reference to the alleged “mischaracterisation” of the Rosella well that was a key component of its 14 May letter,’ Mr Gill said.
‘The material provided in the OCSG’s response implies a seismic shift in the OCSG’s interpretation of “effective consultation”, which Metgasco considers does not accord with the OCSG’s own guidelines. We also do not consider the OCSG’s position is reasonable or practical.’
Metgasco says it expects the court to overturn the suspension decision.
‘It is our intention to resume drilling of the Rosella conventional well as soon as practicable after this time. We will be seeking an assurance from the NSW Government that lawful activity in the northern rivers will be supported and protected,’ Mr Gill said.
The letter also indicated, for the first time, that the company is looking for opportunities outside the northern rivers.
‘We remain confident that gas development in our exploration licence areas can have an overwhelmingly positive impact on the northern rivers and NSW. However, 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,’ the letter said.