Hello bruthers
I liked this section from the Prospectus. I know our Gas is years away from market, but I'm looking forward to the political exposure in the responsible media about our new Premier and his 16th study into fraccing. No native royalties, less State income...GENIUS
7.2 Company specific
(a) Government Policy and Hydraulic Fracturing
The Western Australian Government (Government) has adopted a policy
which places a moratorium on hydraulic fracturing (fraccing) whilst it
undertakes an independent scientific inquiry into fraccing. No details of
the timing or scope of the inquiry have been made available by the
Government at the date of this Prospectus.
Fraccing will be required as part of the exploration, appraisal and
development of the Company’s tight gas and unconventional gas
resources, but is not necessary or intended for its development program
at the Ungani Oilfield, or for future exploration for and production of
conventional oil and gas resources.
The outcomes of the Government’s independent scientific inquiry into
fraccing are uncertain and may potentially impact on the Company’s
ability to explore, appraise and develop the Company’s tight gas and
unconventional gas resources.
The Company has no immediate plans to undertake any hydraulic
stimulation operations.
(b) Petroleum Titles
The Company’s exploration permits set out minimum work commitments
which include the undertaking of well stimulation and the drilling of wells
which are likely to be targeted to tight gas accumulations. As a
consequence of the Government’s policy to place a moratorium on
fraccing, the Company will not be able to fulfil some or all of its current
work commitments including current commitments to carry out a well
stimulation on EP436. The Company has therefore lodged applications
with the Department of Mines, Industry Regulation and Safety to suspend,
exempt or vary the Company’s minimum work commitments on all its
various permits. The Company is awaiting the Department of Mines,
Industry Regulation and Safety’s response to these applications.
(c) State Agreement
The Company, the State of Western Australia, Mitsubishi Corporation
(MC), Diamond Resources (Fitzroy) Pty Ltd (DRF) and Diamond Resources
(Canning) Pty Ltd (DRC) are parties to the Natural Gas (Canning Basin
Joint Venture) Agreement dated 7 November 2012 (State Agreement).
Under the State Agreement, the Company, DRC and DRF are obliged to
explore and evaluate exploration permits EP371, EP391, EP428, EP431 and
EP436 to prove up sufficient reserves to underpin the establishment of a
viable domestic gas project for delivery and use of gas within Western
Australia (Domgas Project).
The State Agreement suspends the operation of section 41 of the
Petroleum and Geothermal Energy Resources Act 1967 (WA) which is a
provision that says on application for renewal of an exploration permit,
the number of blocks within the permit shall be reduced by 50%.
The State Agreement provides for certain events to occur by certain
dates. Various key dates were extended by two years when the parties
executed a Ratified Variation Agreement dated 1 July 2015.
The Company, DRC and DRF are currently obliged to submit a proposal
for the Domgas Project by 30 June 2018.
In the period from 31 December 2017 to 31 March 2018, the Company,
DRC and DRF may individually give notice to the State that they do not
intend to submit a proposal for the Domgas Project and if this occurs the
State Agreement will terminate.
The Company has requested that the various parties enter into
negotiations in regard to the State Agreement in order to vary the
agreement to reflect the delay and any other issues arising as a
consequence of the Government’s current policy in relation to fraccing.
If the State Agreement is terminated in the first quarter of 2018 in
accordance with the process set out above, section 41 of the Petroleum
and Geothermal Energy Resources Act 1967 (WA) would apply to any
future applications for renewal of exploration permits EP371, EP391, EP428,
EP431 and EP436.
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