Metgasco cites ‘political climate’ in gas reserves downgrade
METGASCO has reclassified its assets and gas reserves, citing uncertainty in the NSW political climate.
The move, ratified by the Metgasco board, comes as the company prepares its annual accounts.
In a statement issued to Australian Stock Exchange shareholders on Friday, the company announced "Metgasco's board determined that it was appropriate to reduce the value of previously capitalised exploration and evaluation expenditure to nil, and reclassify its reserves to resources".
"This is despite the company's confidence in NSW needing its gas supply and in the medium term development of the company's coal seam gas resources," the statement said.
Metgasco managing director Peter Henderson said despite the reclassification the company remained determined to explore gas reserves in NSW.
"The board fully considered these accounting matters and considered that the changes are appropriate to properly reflect the state of Metgasco's New South Wales business interests," he said.
"The company's current share price indicates that the financial market has already recognised the New South Wales political climate and its effects on Metgasco.
"Despite the asset impairment and reserves reclassification, Metgasco remains committed to pursuing the significant gas potential in its New South Wales exploration licences."
The NSW Government's Office of Coal Seam Gas suspended Metgasco's permit to test drill a tight sands gas well on a Bentley property in May.
Metgasco has begun legal action in the NSW Supreme Court.