Dart Scraps IPO, Cuts Jobs on Australian Gas RestrictionsJames Paton
Dart Energy Ltd., a coal-seam gas and shale explorer, fell to a record low in Sydney trading after scrapping an initial public offering of its international assets and cutting staff by 70 percent.
The shares slumped 44 percent to 5.9 cents in Sydney, valuing the company at A$52 million ($54 million). Dart sold shares to institutions at 69 cents each in July 2010. The S&P/ASX 200 Index rose 0.4 percent.
Dart’s decision follows moves by governments in Australia to introduce stricter controls for development of coal-seam gas projects. The Singapore-based company will focus on CSG and shale assets in the U.K., according to the statement.
The rules mean that “investment is leaving the country, field operations are being suspended, Australian jobs are being lost and the impending energy crisis in New South Wales is not being addressed,” Chairman Nick Davies said in the statement. “This is in direct contrast to the United Kingdom.”
Dart had planned to sell shares in its international unit in November in London, the company said last year without saying how much it planned to raise. This follows a decision by the company in May to defer the proposed IPO after market conditions deteriorated and its shares plunged.
Robbert de Weijer, chief executive officer of the Australian business, will leave as part of the job cuts, according to the statement. The company said it may seek partners or sell some assets in India, Indonesia, China and parts of Europe as those operations are scaled back.
John McGoldrick, CEO of Dart Energy International, will become CEO of Dart Energy, the company said.
The federal government in Australia plans to tighten the approval process for coal-seam gas projects to ensure protection of water resources, while New South Wales, the country’s most populous state, moved last month to restrict access to some areas for drilling in response to environmental concerns. AGL Energy Ltd. has said that New South Wales needs to develop the resources to address a looming gas shortage and that the new state rules may force it to write down the value of two projects.