It is perfectly clear to me that the State Government have acted...

It is perfectly clear to me that the State Government have acted grotesquely and immorally in this dispute. I could spend hours writing about it with well founded comments. Leaving all that aside, my thoughts here are focused on the question of whether to accept the offer or not.

Most unfortunately it must be recognised that the Metgasco shareholders, at this point, only have a case in respect of the abrupt suspension of the drilling licence where the Government did not observe the law. In respect of this illegal behaviour the damages at most would be to cover the costs of mobilisation and the damage to the Metgasco brand etc. We know the costs of mobilisation were around $3 to $4 mill. The damage to the Metgasco brand etc is a grey area and my wild guess would amount to a maximum of $10 mill. Assuming Metgasco won and were awarded costs they might win $14 mill. This would take years to resolve if it went all the way through the courts. With the $7 mill in the bank the Company could try to recommence drilling but with the State Government holding the power to delay drilling (for whatever reason they might conjure up) Metgasco would be in the very difficult position of being an enemy of the State Government in the courtroom and relying on their consent for drilling.

I think it is important to recognise that there is presently no case against the Government for destroying the Metgasco business and recovering $100 mill + representing the money that the shareholders have invested. Although we all know that the Government's toing and froing is in fact the real cause of the collapse in the share price ~ the Government has not actually broken any law (except when they illegally suspended drilling at short notice as above which would give rise to a far lower claim).

In essence, apart from the resistance from the locals, Metgasco's main problem is that it is weak and the State Government is strong. The State Government's strength is woefully undeserved. It's representatives (mainly Roberts) have acted in a disgusting fashion ~ not just because they have expediently traded votes for principle but most obviously when they publicly announced referral of an individual to ICAC that was peremptorily dismissed. Unfortunately, the State Government has power.....not least the power to change the laws that Metgasco currently relies on. Unfortunately, justice to Metgasco relies on the decency of the State Government and as this Government has amply demonstrated it is concerned with votes and not so much with doing the right thing.

I can see only two courses that Metgasco can take to preserve its investment in the Northern Rivers. Firstly, to continue the court case with the probable outcome that they would win but be faced with a hostile State Government that would obstruct in every way legally possible to permit further drilling. This would likely end with the demise of Metgasco through lack of funds or the creation of new laws that would be fatal to Metgasco. Secondly, to explore being taken over by a far larger organisation that would have the clout to deal with the State Government. This far larger organisation might be a BP or a Shell or an Exon. Whether Metgasco could find such an organisation is another matter.


These are my musings. I will not take offence if you laugh me out of the room or if you think I am full of sh1t. I would be interested in your thoughts.