History
Black Mountain Energy listed in 2021 to appraise its Valhalla gas project in WA, met repeated delays, sold a Permian stake at a profit, and delisted in March 2024.
2021-2022: Listing and the Valhalla plan
Black Mountain Energy was admitted to the ASX on 21 December 2021, with trading starting on 23 December. Its initial public offering raised $11 million by selling 55 million shares at $0.20, and 200 million existing shares were held in escrow (locked up) for 24 months. The company's asset was Project Valhalla, a gas exploration permit called EP 371 in the Canning Basin, Western Australia, held through subsidiaries. It was estimated to hold 11.8 trillion cubic feet of prospective gas and 1.5 trillion cubic feet of contingent gas. BM Canning LLC was the largest shareholder, and the prospectus described the company as highly speculative.
In April 2022 the state regulator approved the environmental plan for a 130 km 2D seismic survey (a way of imaging rock layers), and surveys found no threatened plants or Greater Bilby sightings. A blending study found Valhalla gas suitable for blending into existing WA pipelines and for LNG conversion, though no sale deal followed. In June a US firm, Highwire, gave a non-binding letter of intent to buy well-test gas to power cryptocurrency mining servers.
The second half of 2022 went badly. Michael Laurent was appointed chief operating officer, replacing Samantha Richardson. The seismic work stalled awaiting a final approval, then BME could not find a replacement crew before the wet season, pushing the survey to early 2023. In December, answering an ASX query, BME confirmed that its gas export exemption was conditional on agreeing a Domestic Gas Commitment Agreement with the State, a condition it had not previously disclosed.
2023: Delays, a Permian detour and a sale
In January 2023 BME paid a $39,960 ASIC penalty, without admitting fault, over alleged misleading carbon and emissions statements. Later that month it agreed to buy the Half Moon Prospect in New Mexico, eight producing wells making about 77 barrels of oil equivalent a day, for US$2 million cash. It was the company's first producing asset.
Valhalla slipped again. State environmental feedback called for extra baseline studies, and floods limited access. In April the regulator approved an 18-month suspension and extension of the work program, moving seismic and drilling to the 2024 and 2025 dry seasons.
To fund this, BME launched a 2-for-3 entitlement offer in February at $0.025 a share, a 37.5% discount to the prior close, seeking up to about $4.25 million. Rhett Bennett and BM Canning committed at least $2.1 million. Take-up was roughly 65%, and with the shortfall placement the offer and placement raised $3.155 million before costs. Shares on issue stood at 383,224,186 at the end of 2023.
In June BME joined an appraisal well at Half Moon operated by Manzano Energy, taking an 11.7% share at about US$1.44 million of a US$12.3 million cost. It booked first contingent resources at Half Moon, and by early July the well had reached its planned depth with a long lateral section in the target formation, with no flow results reported. Then in August BME agreed to sell the Half Moon acreage and its interest in that well to Tap Rock Resources for US$6.87 million, keeping the eight producing wells. The sale settled on 13 October, bringing in US$6.58 million (about A$10.4 million) before tax, with proceeds earmarked for Valhalla.
2023-2024: Leaving the ASX
On 28 December 2023 BME applied to be removed from the ASX. The board pointed to a market value of about $8.81 million against roughly $7.5 million in cash, weak fundraising support beyond Rhett Bennett's entities, and low trading liquidity. Shareholders passed the required special resolution at a meeting on 12 February 2024.
BME began 2024 with about A$7.7 million in cash. It said it remained committed to Valhalla approvals, with 130 km of new 2D seismic planned beyond 2024. On 15 March 2024 it was removed from the ASX Official List at its own request, so its shares can now be sold only off-market. At that date Valhalla still awaited environmental review feedback and a referral under federal environmental law, and the Domestic Gas Commitment Agreement remained open. The retained eight Morrow wells in the Permian were shut in until gas prices rise.
Written from the 26 story beats below (2021 to 15 Mar 2024), which come from the company's own announcements and filings.