Santos, the company hoping to mine coal seam gas from the Pilliga, is facing a combination of circumstances that’s making them completing the project increasingly unlikely. Back in October when the ANU divested all Santos shares the company was trading at $12 a share, currently they are at just over $5. This fall has been caused in part by the decline in gas and coal prices making investment in companies such as Santos a risky bet.
Recently word has been going around town that Santos was looking to run the gas pipeline from the Pilliga down the Newell Highway and through/close to Coonabarabran; a change from the plan to either pipe it across the Liverpool Plains (which is now a political hotbed of anti-mining farmers) or north to Queensland for processing in China (which adds extra dollars to an already expensive cost to extract the gas).
Santos is looking for ways to avoid missing their half yearly interest payment, their current debt to equity ratio has tipped into the red with 108c of debt for every 100c of equity. More troubling are economists calling out Santos for not truly and fairly representing the value of their assets, assets whose value should have fallen sharply but are still at pre-fall values on the balance sheet.
While Lock the Gate and Coonabarabran Residents against CSG have campaigned hard to close down the Santos Pilliga CSG mine, it looks like the movements of a capitalist market will do in the unprofitable project before it gets fully off the ground.