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February 28, 2021

Metgasco sets high price for buyback

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Metgasco CEO Peter Henderson. Photo Metgasco
Metgasco CEO Peter Henderson. Photo Metgasco

Chris Dobney

Junior gas miner Metgasco has revealed that it rejected a government offer regarding ‘the future of gas exploration and development in the northern rivers’ in its annual report released yesterday.

And it has set a high bar for any future offer to buy back the company’s northern rivers CSG licences, saying any terms must ‘reflect the facts that Metgasco has, in good faith, invested $128 million in operations on licences issued and renewed by successive governments over more than 10 years, and that Metgasco has established significant coal seam gas reserves and identified exciting conventional gas potential.’

The company announced that it lost $3.85 million in the 2015 financial year.

The report also reveals that Metgaso CEO Peter Henderson was paid $ 425,916 and executive director Sean Hooper received $234,544.

Neither Mr Henderson or Mr Hooper were granted long-term or short-term share bonuses during the period.

An unexpected expense during the financial year was the decision to take the NSW Government to the Supreme Court over the Office of CSG decision to suspend its Bentley licence. That further set Metgasco back a quarter of a million dollars.

Metgasco’s share price dropped by 40 per cent following the government’s suspension.

The company will be expecting further court costs this financial year after it cut off compensation negotiations with the government in August and decided instead to return to court.

‘The suspension compensation that Metgasco is seeking covers damages associated with drilling cancellation costs, higher costs for future drilling, overhead costs while the court action was taking place, delays to its exploration and development program, and damage to investor confidence,’ the report says.

‘Metgasco made it clear to the NSW Government that it prefers to negotiate compensation for damages out of court and advised the Government that it was prepared to put a hold on court action until August 31, 2015, while negotiations proceeded.

‘Given negotiations to that date did not resolve the matter, Metgasco initiated court action for damages.’

The company says it is also seeking, ‘explicit public confirmation from the NSW Government that it supports Metgasco and the gas industry in NSW and that it is prepared to provide police support [our italics] for Metgasco’s lawful exploration activities.’

The directors’ report concludes that the challenges facing Metgasco in 2016 are to either: proceed with our NSW exploration and development program and seek damages from the NSW Government for the unlawful 2014 drilling suspension, either through negotiation or in court; or withdraw from the NSW assets if the Government is prepared to offer buyback terms that are acceptable to your board and approved by shareholders, while continuing to seek business opportunities outside NSW.’

The matter is expected to reach court in December.


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9 COMMENTS

  1. What other business would invest $128 million in a project that was so unpopular that it (apparently) required police protection to carry out, resulting in a reduced share price of 40% and a $4 million annual loss, and then have the balls to not only take the government to court but then demand a government bailout? This is a corporation gone rogue. It is complete and utter madness. Metgasco will never have a profitable operation in this part of the world. They should walk away now and cut their losses.

  2. Folks … mining is a speculative industry. Metgasco had a licence to speculate, issued by the then-Labor government and renewed over a decade with enthusiastic support from the governing NSW LNP government, represented in Lismore by Thomas George.
    Metgasco failed to comply with the terms of its licence in many ways: discharging toxic fluids into the Casino sewerage system; failing to report an explosion; leaking holding ponds and other offences.
    The offence the NSW Court ran with, when the chips were down and a massive confrontation between police and protectors was scheduled any moment, was Metgasco’s failure adequately to consult with its community. The licence was suspended. By then Metgasco had spent a lot of money, speculating. They took the NSW government to the Supreme Court to appeal and the suspension of its licence was revoked.
    But no amends were made for its failure to consult, and with no lessons learned, Metgasco has announced, whether you like it or not, its intention to return to Bentley and conduct seismic testing at Rock Valley.
    Its refusal to accept the buy-back terms offered by the State government demonstrates that Metgasco will continue to fly in the face of overwhelming public opinion, disrespect the communities whose lands it wants to despoil and never take no for an answer.
    With speculation, you win some, you lose some. Metgasco is already a big-time loser, and if they want to know how greatly their speculation has misfired, they only have to return to the Northern Rivers and face what awaits them here.

    • Speculators take risks but we won’t . Our water , air and soil are precious to us ,in fact we would be sickly if these were polluted . Peter Henderson , you have gambled and you have lost. There is no way we will let our environment be destroyed , we will protect and defeat you. We have discovered something more important than money: a community and for this THANKS as many ppl have had their life transformed by “THE BENTLEY’S BLOCKADE” . Our government may not have the courage to legislate your demise but rest assured PETER that we will. Daniele

  3. Well said Jennie Dell! In a nutshell!

    It also bothers me that Thomas George is weighing in and “challenging” Lismore City Council to cough up and contribute to the buy out of Metgasco!?

    I think it would be wise for Mr George to remain quite, as he has done other than in Parliament years back singing the praises of Metgasco, and then claiming the victory for the other License buybacks a few days ago? Other than that the silence has been deafening. It was the community who worked so hard to have that happen. George said nothing. Never attended any of the hundreds of meetings the communities organised over the years against gas.

    And continued silence would be a good idea, especially when the fact remains he is now appealing publically with is buyout challenge, for a company that his son is the Land Manager for? That’s just wrong.

  4. I Totally agree with Jennie Dell. Metgasgo should lose their licence, with no compensation. Why should the taxpayers bail out a failed company? They have never received a social licence (nor will they ever be likely to).
    If they are too silly to accept the compensation offered in good faith, they should lose the lot, as well as losing the right to mine.

    I for one will be impeding Metgasco if they attempt to resume exploration or actually start extraction. After seeing what happens in a Gas wasteland as in Tara/Chinchilla in Qld, we need to ensure this rape of the land does not occur in our relatively pristine piece of paradise. (Around Tara they are now spraying polluted water on to Bitumen roads to reduce the storage in ponds. Native animals are now less common in the area (such as frogs & reptiles) & roof water is no longer able to be used due to heavy metal contamination from the dust that blows off the roads when the polluted water evaporates leaving the metallic salts that are likely to be carcinogenic.

    Go away Metgasco

  5. Next step – Revoke their corporate charter! Business was supposed to be about public good – we want companies we can believe in – we want businesses in our region that contribute to and are a part of the community. Vigilant citizens are our only hope for the future – send these people packing up their poisons.

    Look at the Quakers – they were excellent business people that never lied, never stole; they cared for their employees and the community which gave them the wealth. They never took out than they put back in.

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