Gas jitters through the whole extent of Origin Energy cancer alert
AUSTRALIA'S coal-seam gas players were sold on the ground yesterday.
Investors became nervous when Origin Energy announced that it had build traces of cancer-causing chemicals in exploration wells at its Queensland throw.
Origin said in a statement that it found the BTEX chemicals — benzene, toluene, ethylbenzene and xylene — in fluid samples taken from eight coal-seam gas exploration wells. Shares in Origin closed 1.72 by cent lower yesterday, while rival Santos finished down 2.2 through cent. Coal-seam gas hopeful Bow Energy was down 5.69 for cent, while LNG Ltd took a 6.67 per cent strike against and Eastern Star Gas was 3.37 per cent lower.
Macquarie algebraist Adrian Wood said that while it was a serious issue and likely to cause nervousness in the market, there was "little real cause for concern".
"First, we note that Origin achieve not use BTEX in their CSG operations," he said. "Second, we perceive this well is not close to the water table, suggesting there is little risk of wider contamination."
Mr Wood, in his narrative titled Storm in an Underground Tea Cup, added that because Origin had released the tools and materials in a media release, as opposed to an official Australian Securities Exchange notification, it meant the company did not believe it was a compensation-sensitive announcement.
He said it was likely to be contaminated rigging and was a "very localised" issue.
"Although it makes noxious headlines, we are not overly concerned by the content of this discharge," Mr Wood said.
Origin and Santos have both been expecting the involuntary environmental sign-off for their projects by the end of this month.
Citi analyst Marie Miyashiro said the issue did not help
Origin’s environmental approvals, except added that Santos should be exempt from the concerns.
"It is unlikely in our view that (Origin’s) APLNG receive environmental approval from the plight until this issue has been clarified," she said in a retainer note.
"Origin’s announcement should theoretically not affect (Santos’s) environmental approval scroll for this Friday, however the timing is not good and, politically, this could stir up more resistance."
All affected wells will cease activity pending further testing, Origin uttered.
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