Wednesday 22 October 2014 Supreme Court Action Update Metgasco Limited advises that its case to have its Rosella drilling suspension lifted was heard by the NSW Supreme Court on 20 and 21 October, on schedule. Metgasco believes that the NSW Government’s suspension of Metgasco’s activity approval was unlawful for multiple reasons, summarised as follows: · the Government did not have the power under the Petroleum Onshore Act to take the action; · even if it had, it did not follow the procedures defined in the Act or afford Metgasco procedural fairness; and · the decision to suspend drilling activity based on Metgasco’s community consultation could not have been made rationally. Metgasco takes all regulatory compliance requirements seriously and believes it satisfied requirements of the Government’s consultation guideline. Metgasco hopes for a prompt decision from the Supreme Court. However, the company has no control on the timing, nor any indication of when the decision will be made. Background to court action: · Metgasco has been exploring for gas in the Clarence Moreton Basin for ten years and has invested about $120 million. In doing so it has established significant coal seam gas reserves and identified significant conventional and tight gas potential. It has drilled more than 50 wells and has had more than 300 land access agreements, all voluntary. · March 2013: Metgasco lodged its environmental approval submission for the Rosella well. The primary objective of the well is to test the conventional gas potential in the Greater Mackellar structure. The well has secondary tight gas exploration targets. The environmental submission included explicit information about the community consultation program specific to the well. · January 2014: Metgasco advised Minister Roberts’ office of its community consultation program and received no response. · February 2014: The environmental approval to drill was approved by the OCSG, allowing Metgasco to commit to a range of contract services required to drill the well. Metgasco negotiated a land access agreement with a farmer who enthusiastically supported the planned well. · 14 May: the OCSG suspended Metgasco’s approval to drill the Rosella conventional well on the basis that Metgasco had not complied with the NSW Government’s community consultation guideline. It did so without giving prior notice to Metgasco or expressing any concern regarding Metgasco’s community consultation program before the suspension notice was issued. Metgasco was within days of having the drilling rig and other services mobilised to site. It was forced to cancel drilling contracts, incurring considerable expenses in doing so, and Metgasco’s share price fell by 40%. · 15 May: Metgasco wrote to the OCSG, demonstrating that it had complied with the consultation guideline and requesting that the suspension decision be reviewed and the suspension lifted. Metgasco challenged the suspension on the basis that: o The Government did not have the right to take this action under the Petroleum Onshore Act (POA); o The OCSG had not followed the procedure specified in the POA or afforded Metgasco procedural fairness; and o Metgasco had complied with the Government’s community consultation guideline. · 22 May: Metgasco wrote to the NSW Premier, asking that a party other than the OCSG review the suspension decision given that it was unreasonable for OCSG and parties involved in the original decision to review their own decision. The request was effectively ignored. · 27 May: the OCSG wrote to Metgasco, providing reasons that it was minded to maintain the suspension, and asking for Metgasco’s response. · 3 June: Metgasco filed a summons in the NSW Supreme Court seeking to have the suspension decision overturned, providing the potential for a legal remedy if the OCSG’s internal review did not result in the suspension being lifted. · 6 June: Metgasco responded to the 14 May letter, expanding on previously stated reasons for its belief that it had complied with consultation requirements. · 6 June: Metgasco lodged a Notice to Produce in the Supreme Court to obtain information relevant to the suspension decision. · 26 June: the OCSG responded to Metgasco’s 6 June submission, confirming the previous decision to suspend Metgasco’s activity approval. · 7 July: Metgasco amended its 3 June summons to take into account material in OCSG’s 26 June response. · 9 July: Justice Davies of the Supreme Court handed down his decision on Metgasco’s Notice to Produce, setting aside certain paragraphs of the Notice on the basis that the Notice was “premature”. Justice Davies stated that his decision did not preclude Metgasco from serving a further Notice to Produce after the amended pleadings had been finalised and both sides had filed their evidence. · 21 July: NSW Government filed a response to Metgasco’s summons. · 28 July: Metgasco served its evidence, consisting of affidavits from two employees, on the Government as required by the matter timetable. · 8 August: Government advised that it could not file its evidence on the due date (8 August) due to the unavailability of key personnel. · 12 August: Government advised that it would not file evidence in the matter. · 5 September: Metgasco’s Summary of Argument filed. · 26 September: NSW Government’s Outline of Submissions filed. · 9 October: Metgasco’s response to the NSW Government’s Outline of Submissions filed. · 20 and 21 October: NSW Supreme Court hearing.
Posted on: Wed, 22 Oct 2014 09:49:46 +0000
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