Bounty Oil & Gas backs BPH Energy and Advent in dispute over PEP-11 gas exploration rights
Unlisted Advent Energy and its major shareholder BPH Energy (ASX: BPH) have found an ally in Bounty Oil & Gas (ASX: BUY) regarding their assertions that the New South Wales government is treading in federal territory with its new plans to block activity in the large PEP-11 permit.
Operated by Advent, with Bounty holding a 15% direct interest, PEP-11 is located offshore from Sydney and Newcastle.
While it has been assessed to potentially contain one of the largest undeveloped gas resources on the east coast, the licence has been threatened a number of times by the NSW government.
When the latest threat came to light last week, Advent (and BPH) executive director David Breeze vowed the company would continue to press forward with its plans to explore the permit.
In response to news that NSW is introducing legislation to ban offshore oil and gas activities, Bounty pointed out that the state of NSW and its government only have jurisdiction to control exploration and extraction in coastal waters within 3 nautical miles (4.83 km) of the NSW coast.
“PEP-11 is beyond that 3 nautical mile limit and all such matters touching PEP-11 are under the jurisdiction of the Commonwealth of Australia (i.e., the Australian Government),” the ASX release stated.
“Gas exploration operations including safety and environment are controlled by NOPSEMA [the National Offshore Petroleum and Safety Authority], a Commonwealth of Australia authority.”
Bounty also confirmed the holders of PEP-11 intend to pursue gas exploration (by drilling around 26 km offshore), well beyond the limit of NSW coastal waters.
Drilling approval sought
Advent and Bounty are currently seeking commonwealth approval for extension and variation applications for PEP-11 to enable the drilling of the Seablue-1 gas well.
While these applications are being considered, Asset Energy is continuing to investigate the availability of a mobile offshore drilling unit to drill Seablue-1 on the large Baleen prospect.
It is in discussions with drilling contractors and other operators who have contracted rigs for work in the Australian offshore region in the first half of 2024.
New gas needed
Bounty also highlighted the strong show of support shown for future gas expansion in submissions to the Australian government’s Future Gas Strategy consultation.
Almost 300 submissions were made from a range of stakeholders, including industry, peak bodies, civil society, individuals and government.
Submissions were provided by key gas and energy producers as well as a range of energy-intensive industries that rely on gas—including cement, aluminium and steel.
Bounty noted an apparent trend across the submissions that respondents – either producers or users of energy and gas – recognised the important ongoing role gas will play in providing secure, affordable energy on the road to net zero including as a complement to renewable energy deployment.
Capital raised
BPH Energy, which holds a 35.8% stake in Advent, last week declared its gas interests would receive the majority of the $2.25 million it had raised with a successful placement.
New sophisticated investors including high net worth, family office and dedicated resource funds participated in the strongly-supported raising.
Mr Breeze said the new funding would allow BPH to accelerate exploration programs to unlock the potential of its gas projects – particularly in light of the current gas supply crisis.
He said the proceeds raised under the placement provide BPH with a strong cash position to fund its hydrocarbon projects, with $1.75m to be set aside for funding for exploration and development of oil and gas investments.