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State Gas (ASX:GAS) has dipped nearly a fifth of its value on Monday after an unfortunate revelation – it can’t access its Rolleston West project.
The company only gave a brief explanation on Monday about what, exactly, is going on.
“State Gas advises that a dispute has arisen between the Company and the owner of the land on which the company’s Rolleston West Project is located,” it wrote.
“The landowner has now blocked the Company’s access to its Rolleston West Project assets including exploration wells and the Company’s compression facility.
“The company considers the landowner’s actions to be in breach of the access agreement and is now considering all of its legal options, including potential for consequential damages.”
A 2021 seismic reprocessing report, part of the QLD government geological library, noted farming land occurs within the permit boundaries.
“The eastern third of the permit area is characterised by low relief open grazing country bisected by the north-south Carnarvon Highway and Rewan Road,” the report stated.
“The central third of the permit area is dominated by rugged scarps and valleys, and the western third of the area contains a mix of forested rugged terrain and some open grazing country.”
State Gas has been targeting the Bandanna coal measures at Rolleston West which is in QLD-issued permit ATP2062. The acreage is believed to contain conventional hydrocarbon deposits as well as geological assets that can be fracked (gassy coal).
The Queensland Resources Council notes State Gas’s Rolleston West play is particularly noteworthy given the company built a compression plant on-site. In other words, a processing facility to allow gas to be ultimately sold.
But now, access to that compression facility has been indefinitely prohibited by the landowner of the acreage.
At least one HotCopper user in the announcement thread described themselves as intending to sell off on the news – which apparently has been a lot of other shareholders’ strategy, too.
GAS last traded at 3.5cps.
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