4 February 2016
AGL announced it will not proceed with the Gloucester Gas Project. Resulting impairments included additional provisions ensuring rehabilitation costs have been appropriately provided for.
AGL has completed the business case for the Gloucester Gas Project which incorporated disappointing gas flow data from the Waukivory Pilot wells and economic modelling of the gas resource. Unfortunately, the economic returns to support the investment of approximately $1 billion were not adequate. Consequently, in the interest of AGL's shareholders and customers, this is the most responsible course of action.
AGL will relinquish its Petroleum Exploration Licence for the Gloucester region (PEL 285) to the NSW Government and will now commence a comprehensive decommissioning and rehabilitation program for its well sites and other infrastructure in the Gloucester region.
AGL will establish a $2 million Independent Trust Fund and will work with the Gloucester community to identify investment options to deliver ongoing economic benefit to the region and its communities.
1 February 2015
AGL has been conducting flow testing of its four Waukivory Pilot wells to provide additional data for the business case upon which the AGL Board can make a decision on the Gloucester Gas Project.
As part of this testing program, we stopped the removal of water and flaring of gas from the wells in mid-December. This will allow us to better understand the properties of the gas reservoir. These results will be reviewed as part of the decision on the future of the project
In late January we commenced the removal of water used in the well workover activities in late 2015 for treatment and approved disposal. The saline water has been held in bunded tanks at Waukivory. Removal of this water by our contractor is expected to be completed within the next few weeks.