The company said it has taken advantage of the NSW government’s voluntarily buy-back scheme – announced as part of the NSW Gas Plan – and has sold PEL 5 which covered an area of almost 400 square kilometres between Wyong and Morisset.
AGL made the decision to sell PEL 5 back to the NSW government after it was deemed “not to be commercially viable”
One of the oldest licences in NSW, the block was first awarded in 1991, and formed part of the wider Camden CSG project, the state’s oldest active gas project was responsible for all of the state’s gas production.
“The majority of the surface area is covered by lakes and mining leases leaving only 10% of the PEL area available for exploration,” AGL’s acting group general manager of upstream gas, Scott Thomas, said.
“AGL’s current geological understanding of PEL 5 indicates that the technical elements required for a successful gas project are not present in the available area.
“AGL has a fully operational gas plant in Camden, and approvals for exploration and production of coal seam gas in Gloucester. We will concentrate on delivering value from these assets for our shareholders and for residents of NSW.”
The state’s buyback means AGL can cease spending on the permit, and will pocket some funds from the sale, rather than writing down the value to zero under relinquishment, as would otherwise be normal.
Last week the government announced it had extinguished Pangaea Resources two petroleum exploration licences 437 and 476 covering about 15,600sq.km in northern NSW, buying them back at a price believed to be around $200,000 each after the previous Labor government issued them for a fee of $1000.
