New Gas Fields Not Subject to Price Cap
Sydney, Dec 12, 2022 AEST (ABN Newswire) - On 9 December 2022, the Australian Treasurer, in a joint media release with the Minister for Climate Change and Energy, the Minister for Resources and the Minister for Industry and Science ("the Ministers' Joint Media Release"), announced measures to limit the impact of high gas prices on Australian consumers. The measures include a temporary price cap of $12 / GJ for new domestic wholesale gas contracts by east coast producers for 12 months for gas sourced from current operational fields. A voluntary code of conduct for the gas market will become mandatory, and a reasonable pricing provision will be included.
The gas price cap does not apply to gas from undeveloped fields. In relation to this exemption, the Treasurer stated: "New sources of supply from undeveloped fields will be exempted from the cap, and instead be covered by the reasonable pricing provision, to ensure incentives to invest in new supply are maintained."
A consultation period for the mandatory code of conduct, including the reasonable pricing provision, will be open until 7 February 2023. Clarity on the detail and intended function of the reasonable pricing provision will be critical in determining future investment decisions on supply of gas into the domestic market. Empire intends to make submissions during the consultation period to highlight the important role that the company's Beetaloo Basin gas resources can have in providing material additional supply to the critically short east coast gas market in years ahead while generating broad economic benefits for the people of the Northern Territory and Australia.
The full text of the Ministers' Joint Media Release can be found at Appendix A in link below.
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About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) holds over 14.5 million acres of highly prospective exploration tenements in the McArthur and Beetaloo Basins, Northern Territory. Work undertaken by the Company since 2010 demonstrates that the Eastern depositional Trough of the McArthur Basin, of which the Company holds 80% has very considerable conventional and unconventional hydrocarbon potential. The Beetaloo sub-Basin, in which Empire holds a substantial position, has independently assessed world class hydrocarbon volumes in place with a major ramp up in industry activity underway to appraise substantial discoveries already made by major Australian oil and gas operators.
Empire Energy is an experienced conventional oil and gas producer with operations in the Appalachia region (New York and Pennsylvania). Empire has been successfully developing and producing oil and gas since 2006.
Empire Energy Group Ltd