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Main ForumMetagasco the big winner from BHP's failed Hunter litigation?

  • Court ruling sparks fears for coal exploration

    Posted Fri Mar 12, 2010 10:28am AEDT

    The New South Wales Minerals Council says it fears for the future development of the Hunter's coal industry in the wake of a landmark Supreme Court ruling.

    The judgment against BHP Billiton over land access means all parties with an interest in a property must be consulted before exploration begins.

    It includes financiers and the owners of infrastructure such as power, water and telecommunications.

    Minerals council chief executive, Dr Nikki Williams, says the decision has virtually stopped exploration for new resources.

    "Until all of those land access agreements can be re-negotiated. This will definitely slow, if not close the exploration pipeline, if you don't have a pipeline for development activity, whether that's mine extensions or future investments, you effectively strangle your industry," she said.

    In my opinion: That leaves Metagasco ASX Code: MEL in a powerful position as it has recently dramatically increased its' 2P and 3P gas resources and now places it as NSW premier gas resource. "With its growing certified natural gas reserves close to energy markets and plans for electricity generation, Metgasco is planning on becoming a major supplier of gas to eastern Australian energy markets."

    Metagasco is well outside the fertile farming Hunter region which is down towards Newcastle. The Hunter region is rich farmland that is often referred to as NSW food bowl.. While MEL's leases are up near Casino. Moreover it has established its leases and is not "greenfield" exploration as in BHP's case.

    mel1.jpg

    This image below shows the amount of Gas MEL had in relationship to other NSW gas plays around 18 months ago.
    mel-2p-3p.jpg

    And MEL has recently upgraded their gas reserves markedly:

    mel-upgrade.gif


    Consequently Metagasco seems ripe to pluck NSW gas market and looks like a great investment.

    You can read an overview of MEL here

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