AGL says the value of its Gloucester Gas Project has diminished more than $100 million in the past 12 months, due largely to proposed changes to State government legislation controlling coal seam gas extraction.
The company’s 2013 financial report released last week shows the company more than tripled its profit to the end of June but recorded a $343.7 million loss for its NSW gas assets.
Gloucester remains the company’s largest gas asset, but its book value fell from $454 million to $347.5 million.
The company’s gas assets in the Hunter were the worst hit, falling more than $200 million in value to $10 million.
“While the State Environment Protection Policy (SEPP) has not yet been finalised, State government policy uncertainty has driven a decision by the AGL board to make provisions for impairment on our Upstream Gas NSW assets,” a company spokeswoman said.
“The impairments reflect a prudent view that some projects may not happen based on the current regulatory environment and as such we’ve allowed for impairment of several projects including the majority of the Hunter region assets, the Camden Gas Project northern expansion and future stages of the Gloucester Gas Project.”
In its report, the company said future stages of the Gloucester Gas Project would “potentially” be affected by the proposed State government changes.
“Stage one of the Gloucester Gas Project has received federal and State approvals and remains on schedule to proceed,” the AGL spokeswoman said.
“AGL’s exploration program in the Hunter is also continuing.”