The BPH Energy Ltd (ASX: BPH) share price has come under pressure on Thursday and is crashing notably lower.
In afternoon trade the biotechnology and mineral exploration company's shares are down a massive 21% to 11.5 cents.
This means the BPH Energy share price has now lost 66% of its value since peaking at 33.5 cents last month.
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Why is the BPH Energy share price crashing lower?
Investors have been selling BPH Energy shares on Thursday following an update on its PEP 11 development.
PEP 11 covers 4,576 square kilometres of the offshore Sydney Basin immediately adjacent to the largest gas market in Australia. Management notes that it remains one of the most significant untested gas plays in the country.
BPH Energy has exposure to PEP 11 through its 33% ownership in Advent Energy.
What was the update?
On Wednesday New South Wales' Deputy Premier, John Barilaro, said he was not in favour of the oil project and the application should be rejected.
According to the Coast News, Mr Barilaro said he will "refuse further applications to extend the life of PEP 11."
He added that "PEP 11 was issued under a Commonwealth Act, the exploration area is in Commonwealth waters, and the ultimate decision-making power rests with the Commonwealth."
This is a big blow to Advent and BPH Energy, especially given that the latter has just raised $9 million to advance the project.
BPH Energy response
BPH has responded to the news.
It said: "The Joint Venture notes there have been reported press comments on 10th February 2021 attributed to the NSW Deputy Premier and Minister for Regional Industry and Trade, the Hon. John Barilaro MP. The Joint Venture has received no communication from the National Offshore Petroleum Titles Administrator (NOPTA) in respect of its current applications."
BPH and its Joint Venture Partners have sought clarification from NOPTA.
It added: "The Joint Venture Partners note that the Joint Venture has safely drilled on the PEP 11 permit previously to test for gas and it is confident it will safely do so again. The Joint Venture Partners have retained internationally recognised consultants to assist in this program. The Joint Venture Partners have just announced the appointment of a contracts manager for the Baleen well and are in the process of securing a rig and will release further details on this shortly."
