By Peter Milne
Shareholders that bet on drilling for gas in Western Australia’s remote Kimberley region have voted to take a company off the stock exchange due to a lack of other investors willing to follow them into the company, which blew more than 95 per cent of their money.
In 2019, US-based Rhett Bennett bought permits from Mitsubishi, which had found gas in the Kimberley that would require the controversial hydraulic fracking method to produce, and was hundreds of kilometres from any market.
Large-scale production from the Kimberley would likely need a pricey pipeline to a gas export plant to be viable.
The Japanese trading giant, Origin Energy, Andrew Forrest’s Squadron Energy, and US firms Hess and ConocoPhillips were all interested in the much-hyped Canning Basin a few years ago, but have since disappeared, leaving just a handful of small companies.
From his Fort Worth Base in Texas, Bennett rebadged his firm Black Mountain. In 2021, he gained a much sought-after exemption from the WA government’s ban on the export of onshore gas, helping support an ASX listing in early 2022.
Plans to sell the remote yet-to-be-produced gas have included a mini-liquefied natural gas plant to allow trucks to move the fuel, and enormously long pipelines south to the Pilbara mining region, or east to the Northern Territory.
In 2022, the company proposed gas from its early wells be burnt to power “mobile cryptocurrency servers” provided by US firm Highwire Energy partners.
Lock the Gate Alliance WA coordinator Claire McKinnon said she was concerned Black Mountain’s de-listing would make its operations less transparent.
In December Tamboran Resources, which has encountered significant opposition to its plans to produce gas in the Northern Territory’s Beetaloo Basin, shifted its base to the US to access investors more comfortable with hydraulic fracturing.
McKinnon said potential investors needed to understand the Canning Basin’s remote location, challenging geology, lack of infrastructure and need for contentious fracking to access its gas.
Black Mountain has spent more than $40 million on what it calls Project Valhalla and has not yet drilled a well.
It began the environmental approval process three years ago and is yet to provide its detailed submission to the WA’s Environmental Protection Authority for assessment.
Black Mountain started 2023 by paying almost $40,000 to corporate regulator ASIC on a no-admissions basis for greenwashing. ASIC was concerned that Black Mountain’s claims of developing a “net-zero” emissions gas development were either without a reasonable basis or factually incorrect.
In the lull between Christmas and New Year, the Black Mountain board announced it wanted to return the firm to private ownership.
“The company has approximately $7.5 million cash in hand, compared to the current market capitalisation of $8.8 million - this places no value on the company’s assets,” its statement said.
With recent capital raising finding little support apart from entities not associated with Bennett, who owns 80 per cent of the company, the directors are now seeking a joint venture partner.
Martin Pritchard, spokesman for Environs Kimberley, who has campaigned against oil and gas development in WA’s far north, said it was a great sign that Australian investors had not backed a development that threatened the region’s tourism industry whose offering was based on a pristine environment.
“We are concerned that US investors may support the company’s plans for fracking the Kimberley without realising the serious challenges projects like this have, including the very high-level community opposition,” he said.
On Monday when 94 per cent of shareholders voted to de-list Black Mountain it had a value of $2.1 million. The shares issued two years ago for 20 cents are now worth less than a cent.
The company could not be contacted for comment.
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