Home » Would-be Kimberley fracking company delisting from ASX amid struggle for funds

Would-be Kimberley fracking company delisting from ASX amid struggle for funds

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 faced investment challenges around its proposed gas extraction project in the Kimberley.(ABC Kimberley: Ben Collins)

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.

Map of the Canning Basin in WA's Kimberley region.

The Valhalla project was based in the Canning Basin in WA’s Kimberley region.(Supplied: Black Mountain Energy)

“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.

A man in a wide brim hat standing in front of a beach background

Martin Pritchard says the move shows public support of oil and gas projects is fading.(ABC Kimberley: Andrew Seabourne)

“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.