An American oil and gas company will delist from the Australian stock exchange after making the embarrassing admission that there is a "lack of investor interest" in its flagship Kimberley fracking project, other than from “entities associated with” its Executive Chairman.
Black Mountain’s Valhalla Project is currently undergoing WA EPA assessment. Black Mountain wants to drill 20 exploration wells between 2km and 4km deep and hydraulically fracture them up to 70 times each. It wants to extract up to 100 million litres of water per frack well in the Kimberley’s Martuwarra Fitzroy River catchment.
However, despite initially claiming drilling would begin in 2022 and spending $40 million on the Valhalla Project, Black Mountain is yet to drill a single well in Western Australia.
Environs Kimberley spokesperson Martin Pritchard said, “This is a great sign that Australian investors do not support industrialising world famous Kimberley landscapes through oil and gas fracking. The intact nature of the Kimberley is the bedrock of the region's $600 million tourism industry. Oil and gas development would destroy that.”
“Climate change is already heavily impacting the Kimberley with last year’s record floods and temperature increases projected to make much of the region unliveable leading to severe consequences for Traditional Owner communities. Investing in a fossil fuel industry like fracking as the world moves to limit climate change, in an area as remote as the Kimberley is a significant financial as well corporate reputational risk.
“There is a long list of oil and gas proposals that have fallen over in the Kimberley, including New Standard Energy’s failed project, where taxpayers have been left to foot the cleanup bill, likely to cost hundreds of thousands of dollars.
“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.”
“What we need is for the WA Cook Government to ban fracking in the Kimberley. We don’t believe the majority in the WA Labor caucus and ministry support this toxic industry. Now is a great opportunity to ensure vast amounts of carbon stay in the ground at no cost to the government."
Lock the Gate Alliance WA coordinator Claire McKinnon said the company’s decision showed Australian investors were reluctant to support an industry as controversial and environmentally damaging as fracking in a place as remote and environmentally sensitive as the Kimberley.
“Australian investors do not want to support or finance oil and gas fracking projects, particularly in globally-renowned regions such as the Kimberley. They are a high risk investment, clash with climate commitments, and will become stranded assets in a carbon constrained economy,” she said.
“This delisting due to a lack of investment is an embarrassing development for Black Mountain, a self-confessed ‘aggressive’ fracking company that has made all sorts of wild and downright wrong claims about its fracking proposal. No wonder it first announced its intention to delist during the Christmas period when few would be looking.”
A long list of large oil and gas companies have left the "Canning Basin", which sits beneath WA's Kimberley region, after failing to commercialise petroleum resources. The remote location, challenging geology, lack of infrastructure, need for contentious fracking and ongoing community opposition have led to global oil and gas behemoths like ConocoPhillips, Hess, Mitsubishi and Petrochina as well as Australian companies like Origin Energy, Alcoa, Coogee Chemicals and Andrew Forrest’s Squadron Energy exiting the region often with significant investment losses in the hundreds of millions of dollars.
Black Mountain’s wild and wrong claims:
- Its fracking operation would be “net-zero emissions”. ASIC fined Black Mountain nearly $40,000 in relation to this claim last year following complaints from Lock the Gate and Environs Kimberley.
- Its gas could be transported to eastern states via a non-existent trans continental gas pipeline.
- Gas from the Valhalla Project could be used to mine bitcoin.
Ms McKinnon said community groups were now concerned the delisting would lead to less accountability of Black Mountain’s activities.
“While this is a bad look publicly for Black Mountain, we’re concerned that the company’s delisting will mean a lack of transparency for any proposals and the community will be less able to access information on any future projects,” she said.
Black Mountain’s move to delist from the ASX follows a similar decision by American fracking company Tamboran, which is attempting to frack large swathes of the Northern Territory.
Black Mountain shares initially floated at 20 cents but were trading at 0.008 cents this morning.