“The decision to suspend activities was in recognition of the damage being done to the CSG industry by statements and decisions made in the lead-up to the imminent federal election and the instability created by the NSW government’s announcement of further regulatory changes,” the company said.
“As part of it its suspension decision, Metgasco sought and was successful in gaining approval for reduced work programs in its three exploration licences in order to secure the value of the CSG and conventional gas potential it has established to date.”
Following the decision, Metgasco started to implement a number of cost-cutting measures.
“Most of the planned cost reductions have been realised, with staff numbers reduced significantly and a focus now being applied to realising value for surplus stock and equipment,” Metgasco said.
The company has decommissioned 12 out of 19 wells, with the program being on budget and on schedule.
“Looking back, Metgasco’s board has no doubt that its decision to suspend field activity and control costs were necessary and justified,” it said.
The company has spent the quarter focusing on the analysis of results from Clarence Moreton Basin exploration.
Metgasco said it was launching an engagement program to facilitate community and government support.
It held its first community consultation group meeting in Casino during the quarter and plans to distribute a DVD called Switch, which will cover the energy options available and their benefits and drawbacks.
Metgasco will also commission a series of two-weekly newspaper advertisements to push the benefits of CSG.
The company analysed results of a Richmond Valley Council survey that found 70% of people in the community were supportive of CSG, while only 23% described themselves as being very knowledgeable on the topic.
It was not all bad for Metgasco as it ended the quarter with $A21 million in cash and no debt.
The company plans to spend time developing interests outside of the Clarence Moreton Basin.
During the September quarter, Metgasco plans to decommission all wells and water storage ponds, divest inventory and surplus equipment, implement proactive community engagement programs and evaluate opportunities outside of the basin.
