An American-based oil and gas company has cited investment challenges around its planned gas project in Western Australia’s north as a primary reason behind its voluntary delisting from the Australian Securities Exchange.
In 2020, Bennett Resources, a subsidiary of Texas-based Black Mountain, announced its Valhalla project in the Kimberley off the back of the West Australian government lifting its moratorium on fracking.
Trade in the company’s shares, which dropped to 0.007AUD — one seventh of one cent — on Tuesday, are expected to be suspended from March 13, with the company to depart the ASX on March 15.
Black Mountain Energy submitted a referral to WA’s Environmental Protection Authority (EPA) and highlighted plans to undertake controversial hydraulic fracturing — drill and frack 20 wells — in the Kimberley’s Canning Basin, east of Broome, to begin in 2022.
The project has since faced hurdles around WA’s domestic gas policy and faced criticism from environmental organisations.
Four years later, its application is still with the EPA and the project is yet to break any ground.
In December 2023, the company lodged a formal request to be removed from the ASX, with the stock exchange announcement highlighting company challenges securing investment.
“Based on the company’s current market capitalisation and equity markets in general, it is highly unlikely the company will be able to raise the required ongoing funds to keep developing the Valhalla Project,” the ASX announcement said.
It said the company’s removal from the stock exchange was an attempt to “enhance shareholder value”.
On Monday, 94 per cent of shareholders voted to de-list the company from the ASX.
Black Mountain Energy has to date spent more than $40 million on its Valhalla project.
Environmentalists claim win
Environs Kimberley director of strategy Martin Pritchard said the move showed that the Australian public’s support of oil and gas was dwindling.
“We’re very encouraged by the fact that Australian investors have decided not to put money into what would be an extremely destructive fracking project in the Kimberley,” he said.
“It’s really heartening to see Australian investors not wanting to be part of something like that.”
But despite claiming a win regarding public sentiment, he said he was concerned the company’s privatisation would attract overseas investment with little understanding of the Kimberley’s significant natural landscapes and culture.
Late last year, Black Mountain Energy was forced to pay $40,000 to Australian corporate regulator ASIC after being reported for greenwashing regarding the company’s claims Valhalla would be a net-zero emissions project.
Mr Pritchard said the government needed to reflect public sentiment and ban fracking in the region altogether.
The state government has previously flagged it has no intention to change its policies on fracking.
Strategic move
University of Western Australia (UWA) Business School finance professor Raymond Da Silva Rosa said there was nothing particularly sinister behind the delisting.
He said the struggle to secure public financing could reflect a number of challenges smaller companies currently faced in a high interest rate environment.
Professor Rosa said there was no doubt there had also been a shift in public sentiment around fossil fuel projects.
The UWA professor said the company would have access to a lot more funding in the private domain, and would now be “less beholden to the public domain”.
“That would be a bad thing from the environmental [perspective] because it’s being onsold to a purchaser who has less constraints and the ability to exploit the resource with respect to environmental issues,” he said.
“But on the other hand, I think people realise … at the moment we need these companies.”
Black Mountain Energy has been contacted for comment.
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