Metgasco records $2 million loss

METGASCO has recorded a loss of $2,105,164 for the half year to December 31, 2014.

In its consolidated financial report, Metgasco says the loss is due, in part, to "significant legal expenses associated with the NSW Supreme Court action against the NSW Government to have the suspension of the company's Rosella drilling approval lifted".

It also cites "fees paid to professional advisers assisting with the Elk Petroleum merger".

An accumulated loss of $119,761,170 is recorded, with the total equity of the company now reported as being $9,906,903.

The financial report says the company's two principal activities for the period were the NSW Supreme Court action and the merger with Elk Petroleum Limited.

"The (court) matter is now with the judge to determine. Metgasco has no control over or knowledge of when the decision will be handed down.... The outcome of Metgasco's court action is very important for NSW. Genuine and effective community consultation does not and cannot require that everybody in the community agrees with the proposed activity, particularly if the community is taken to include people living in a very wide region and activist protesters, many of whom have travelled from other states," the company said.

The merger with Elk Petroleum has been undertaken to diversify activities outside of NSW. Elk Petroleum is an oil producing company in the Rocky Mountain region of the USA.

Metgasco agreed to provide Elk with a A$2.5 million convertible loan facility to assist with the company's immediate funding requirements as part of the merger agreement on December 22. The loan is to be converted to Elk shares by June 30, 2015.

Since December 31, Metgasco has agreed to loan Elk a further $1.49 million.