Leigh Creek Energy executive chairman Justyn Peters aired his frustration about the national media in a letter to shareholders, published on the Australian Stock Exchange this morning to coincide with the company’s AGM.
“At last year’s AGM on the 18th of October 2018 we had just commenced gasification of our pre-commercial demonstration (CD) plant,” said Peters.
“I want to take this opportunity to discuss … important milestones achieved since completion of the PCD and the complete lack of media reporting on these achievements.
“We have made a number of major announcements and received no coverage.”
The company’s flagship asset is the Leigh Creek Energy Project, an in-situ coal seam gasification operation within the dis-used Leigh Creek Coalfield, located about 550km north of Adelaide.
In-situ gasification converts coal into its gaseous state, which can then be converted into natural gas, urea for fertiliser or used to produce energy.
Peters nominated several of the company’s achievements, which he said had gone unremarked in national newspapers.
Australia consumes about 1500 petajoules of gas energy each year.
In March this year, Leigh Creek Energy achieved certification for 1153 petajoules of syngas at Leigh Creek.
The resource was reclassified as “2P gas reserve”, meaning the company had proven extracting the resource from the ground would be cost-effective.
“Despite this reserve size, we received no media coverage at all from the major national newspapers,” Peters’ letter says.
In August, the company announced that it had met all environmental regulations in operating its pre-commercial demonstration plant at Leigh Creek.
“This announcement proved we could operate environmentally safely and that we had and would continue to work through the approvals process with the government to ensure this was the case,” the letter reads.
“Yet we received no coverage in the national media, despite all the previous negative media attention on ISG (in-situ gasification) and its environmental credentials.”
The following month, the company announced that it had successfully completed a concept study for in-situ gasification, which would be used to cheaply produce urea fertiliser.
The company says the technology can produce the world’s cheapest fertiliser using the process.
“Once again, we had it confirmed through highly reputable third parties that we could produce syngas and urea at low cost,” Peter writes.
“Yet again we were completely ignored by the national media.
“The good news for (Leigh Creek Energy) and our shareholders is that I can assure you this information has not gone unnoticed in the world of urea production.”
Peters said he had made enquiries with his team about why the company had failed to attract more positive media coverage, and resolved that Leigh Creek Energy needed a major buyer for its gas in order to close a “credibility gap”.
“I have asked the question of our team and to our advisors why we have had minimal media coverage,” he writes.
“We have made a number of major announcements and have received no coverage. One analyst stated to me that she went though our announcements and that we had delivered on nearly 90 per cent of all our statements.
“In a recent webinar I commented on this issue. I called it the credibility gap and that we have to close that gap.”
He said there were steps the company needed to take to improve the situation and attract more favourable coverage.
“There are two announcements our shareholders are waiting to hear that will close this gap, and closing this gap is a major focus or our company over the next 12 months,” the letter reads.
“The first is that we have a commercial agreement to sell gas, and/of that we have a partner locked in who has the strength and bank balance to fund the LCEP Leigh Creek Energy Project).”
He added that the company was in discussion with major Australian gas buyers, but that the price offered hadn’t been good enough.
Earlier this month, Leigh Creek Energy head of corporate and investor relations Tony Lawry sent an email to journalists, encouraging them to “draw their own conclusions” about a potential Chinese takeover of the company which was mentioned in the final sentence of an article on a Chinese-language news website.
The sentence, translated to English, reads: ‘It is understood that an investment bank in Hong Kong is conducting a potential acquisition of LCK (Leigh Creek Energy) for a Chinese company.’
Asked for details, Lawry referred InDaily to the company’s managing director, Phil Staveley, who said he could think of several companies that might be interested in taking over the Australian Stock Exchange-listed company.
But he was not aware of any formal plans.
“We don’t know anyone officially (preparing a takeover),” he said.
“If we did, we’d announce it.
“You know rumour and speculation is rife at the moment.”
Staveley said at the time that he did not know why the company had sent the news.china.com article to reporters – but that “there’s always going to be takeover speculation”.
“Whether it’s real is another (thing).”
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