The agreement effectively devalues AGK tenements as they have entered into a private agreement with : NSW Farmers Association; Cotton Australia LTD; NSW Irrigators Council to effectively reduce their rights to explore and produce on land over which they have a petroleum exploration licence. This creates a precedent and subverts the current legislation whereby a landowner has no rights to the minerals under his land. Now landholders will be able to use their surface land access rights as a way to control and exploit their unowned rights to what lies beneath.
There are already provisions governing access so why has AGL done this ?
AGL management have affected the value of AGL as in the absence of an agreement with a landholder AGL would effectively have to offer to buy his property at an "inflated" price in order to achieve access.
AGL had a right to explore and produce under the law and it seems that they have given up this right to the obvious detriment of shareholders and the public at large who need access to energy. A landholder can simply refuse access so any exploration and subsequent production cannot be undertaken.
Seems ludicrous that major industry players like AGL and STO would do this. (STO is also a signatory)
Not good for shareholders or energy consumers. I guess farmers will see that the "well head crop" is more reliable than their wheat crop and sign up to allow access. Whatever way it goes the cost of exploration and production have just increased.
AGK Price at posting:
$15.03 Sentiment: None Disclosure: Held
