Metgasco gets its money back

METGASCO has announced it has been repaid its initial $1.69 million loan plus interest from its now scrapped merger with US-focused oil explorer Elk Petroleum.

The scrip merger deal was originally announced before Christmas and would have fused the two companies under the Metgasco banner but was contingent on oil prices not continuing to fall and Metgasco managing to obtain finance for the deal.

Neither conditions were met, with the Metgasco board exercising its right to terminate the deal mid-last month.

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This morning the company has issued an ASX statement announcing it has been repaid $1,749,456 "being all funds lent to Elk Petroleum Limited under the convertible loan facility, including accrued interest."

The scrapped deal now leaves the company firmly focused on its Northern Rivers exploration plans, which are themselves dependent on a ruling by the Supreme Court due next Friday (April 24) whether the NSW Government had the right to suspend its prime exploration license PEL16 over inadequate community consultation.

Metgasco CEO Peter Henderson said despite local opposition to the industry the company strongly believed it could add value to the Northern Rivers and the NSW economy by developing the significant gas reserves in the Clarence Moreton Basin.

But Mr Henderson said if the government chose to reverse its previous support for the industry, the company, which has spent $120 million on the region to date, should be "compensated accordingly".