Black Mountain Energy Ltd (ASX: BME) is an energy and resources company focused on natural gas exploration, development, and production in Australia and the United States of America.

Activities for the Quarter

• Half Moon divestment closure and settlement realising US$6,577,810 before taxation.
• Resubmission of the Project Valhalla Environmental Review Document (ERD).
• Concluded site-based Project Valhalla well inspections and maintenance.
• The Company voluntarily lodged a formal request with the ASX to delist the Company.
• 200,000,000 ordinary shares and 12,243,788 unlisted options released from escrow.

 

January Quarter Outlook

• The Company expects to receive initial feedback from the Western Australian Environmental Protection Authority (EPA) on its ERD resubmission and enter the public review period.
• Project Valhalla is to be referred to the Department of Climate Change, Energy, the Environment and Water (DCCEEW).
• General Meeting called to allow shareholders an opportunity to consider and vote on the proposed delisting of the Company.

 

Half Moon Prospect

Divestment of the Half Moon Permian basin acreage position and interest in the MIA 64 FEE 2H Well

On 25 January 2023, BME announced the acquisition the Half Prospect for $2m USD. In less than 8 months, the Company quickly progressed its technical understanding, participated in the drilling of a first appraisal well into the 3rd Bone Spring interval and then realised a strong cash offer for the assets.

The Company announced on 24 August 2023 that its wholly owned subsidiary, Seven Rivers Operating LLC, had executed a binding sale and purchase agreement to sell 100% of its acreage and its title and 11.7% interest in the MIA 64 FEE 2H well in the Permian basin. The transaction, that was subject to customary terms and conditions, including closing adjustments, settled on 13 October 2023. The Company has realised US$6,577,810 or around A$10.4m, before taxation, sale proceeds. The U.S.A Internal Revenue Service required that the purchaser withhold US$986,671 as a taxation prepayment resulting in US$5,591,139 being remitted to Seven Rivers Operating LLC. The strategic rationale of the Half Moon acreage divesture is that immediate cash resources will be available to focus on the development of its core asset in Western Australia, Project Valhalla.

Half Moon Share of Production

Amid increased natural gas supply in the USA gas prices remained relatively low during the quarter. Rubicon Oil & Gas LLC, the operator of the eight BME Permian basin wells that the Company has retained an interest in, has ceased production and will not recommence production until gas prices increase.

These 8 Half Moon wells are not included in the Half Moon acreage position divestment.

 

Project Valhalla (EP 371)

The Valhalla Project is in the Fitzroy Trough, west of Fitzroy River in WA’s north, about 2,500km from Perth. The permit area covers 3,662km2 in the Canning Basin and is believed to be a large undeveloped unconventional onshore gas reservoir. The Company aims to develop Valhalla to provide energy security and employment to WA. Valhalla’s location is adjacent key natural gas markets – primarily WA domestic supply, but also to customers in Asia. Previously held by Buru Energy and Mitsubishi, EP371 has existing wells and an Independent Technical Expert has estimated it has 11.8 trillion cubic feet (TCF) of prospective gas resources and 1.5 TCF of contingent gas resources(1) .

Well Integrity Programme

The Project Valhalla well checks and maintenance were undertaken and the required annual report submitted to the Department of Energy, Mines, Industry Regulation and Safety (DEMIRS). The well integrity check program was undertaken and completed during the September quarter followed by lease maintenance. The Company’s three standing well bores successfully and safely underwent the routine maintenance and checks.

Resubmission of the Project Valhalla Environmental Review Document

The Environmental Review Document (ERD) for the Valhalla Exploration and Appraisal Program was re-lodged with the Department of Water and Environmental Regulation on 22 November 2023. The ERD has been prepared in accordance with the EPA Procedure Manual (Part IV Divisions 1 and 2). Australian Environmental Solutions played the major role in accumulating and documenting the required ERD updates.

The ERD is the Company’s response to the EPA’s Environmental Scoping Document, EPA’s 2022 feedback and was submitted after completion of a revised environmental review. The ERD describes the Proposal and its likely effects on the environment.

 

January Quarter Outlook

ERD submission and entering the public review period

The Company is prepared, with the assistance of Australian Environmental Solutions, to address ERD queries as they arise and meet the requirements of entering into the public review period.

Water trigger in EPBC Act – Project Valhalla referral officially required

The expanded water trigger, announced by the Commonwealth during December 2023, requires a person proposing a large unconventional gas development that has, will have, or is likely to have a significant impact on water resources to refer the proposal to the Minister for the Environment for assessment and approval under the Environmental Protection and Biodiversity Conservation (EPBC) Act (section 24D). The water trigger ensures that fracking projects are assessed by the Commonwealth for their impact on water supplies.

The Company has commenced the process of referring Project Valhalla in accordance with the Act.

General Meeting to be held to allow shareholders an opportunity to consider the proposed delisting of the Company.

A General Meeting of Shareholders has been called to be held on 12 February 2024, to consider and vote on, the proposed delisting of the Company. After thorough analysis and consideration, the Director’s recommend that Shareholders approve the voluntarily delisting of Black Mountain Energy from the Australian Securities Exchange (ASX). This recommendation is based on several factors, inclusive of significant cost reductions that, when taken into account collectively, suggest that delisting offers strategic advantages and positions the Company for sustained growth.

Refer to link below for full details of the report.

 

For more information, please contact:

Branka Narancic
Manager of Client Services
Advisir
[email protected]
+61 437 190 010

Michael Laurent
Executive Director and Chief Operating Officer
Black Mountain Energy
[email protected]
+61 8 9200 1685