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June 24, 2024

Metgasco announces merger

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Metgasco's licence to drill at Bentley remains suspended. Now the company wants to merge with Elk Petroleum, which has resources in the US. Photo Eve Jeffery.
Metgasco’s licence to drill at Bentley remains suspended. Now the company wants to merge with Elk Petroleum, which has resources in the US. Photo Eve Jeffery.

Chris Dobney

Junior gas explorer Metgasco (MEL) has announced to the Australian Stock Exchange (ASX) that it plans to merge with fellow ASX small-cap miner Elk Petroleum (ELK).

Elk is currently exploring oil reserves in the Rocky Mountains of the US and is in the process of building the Grieve oil pipeline in the American state of Wyoming.

The company has suffered a massive drop in its share price as a result of tumbling world oil prices. Elk shares, which were trading at $1.30 as recently as May this year, are now down to 40 cents.

Metgasco shares rose from 40 cents to 50 cents on the news.

Metgasco’s shareholders will own 77 per cent of the merged company with Elk shareholders taking the remaining 23 per cent.

In the short term the merged company will focus resources on bringing its US resources into production while it awaits the outcome of the suspension of its northern rivers exploration licence and a further government decision on its Casino production licence.

According to the statement, ‘Metgasco considers that significant NSW field activity has the potential to be further delayed until a stable regulatory framework is demonstrated and investment confidence has returned.’

Metgasco CEO Peter Henderson told ABC radio this morning, ‘We’re keeping our interests in the northern rivers region. We’re very enthusiastic about them we’ve spent a lot of money developing gas resources there… it’s a question of timing.

‘By taking this action with Elk it actually improves our chances of developing the gas resources in NSW,’ he added.

 


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7 COMMENTS

  1. Living and Loving a CSG FREE Northern Rivers, Always.!!! Today a CSG Free Northern Rivers, tomorrow a CSG Free NSW, CSG Free Australia & CSG Free EARTH.

  2. I agree with Raquel, keep them out and keep the Northern rivers free and hopefully Australia free. Happy Christmas and a CSG free New Year

  3. The Fiasco’s oft-cited exit strategy (a.k.a. diversification) is forming!

    WHEN the court ruling goes against them this will be a fine vehicle for the few dollars left after the lawyers get their cut – without this deal they would be little more than a “cashbox” with some tenuous gas leases (facing cancellation when the Alliance are swept from power) and no social licence to operate.

  4. Peter Henderson grasps yet again at whatever straw he can in his attempt to up Metgasco’s woebegone share price. And yet again, he fails to note that, whatever name it goes by, Metgasco just ain’t a rose and isn’t welcome here. Ever.

  5. When 93-98% of communities in the Northern Rivers, who pay taxes to and the salaries of the elected servants of the people, decide that they categorically DO NOT WANT CSG mining in THEIR communities, how are these corporate thugs allowed to impose their will on these communities? Are our duly elected politicians working for the people or are they in the employ of the corporate thugs?

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