The BPH Energy Ltd (ASX: BPH) share price continues to do its dance of speculation. Up and down, the volatility persists, as it has since late January. The culprit appears to be the contest over whether a drilling program will go ahead.
Shares closed the day at 16.5 cents, down 24%.
Why is the BPH Energy share price falling?
The story so far
On 1 February BPH Energy announced its proposal to use the Sydney Basin drilling program to investigate the potential for a carbon capture and storage (CCS) project. The company proceeded to conduct a capital raise to fund the proposed project.
However, the party was crashed when NSW Deputy Premier John Barilaro stated he would refuse applications to extend the PEP11 oil project. This put BPH in a precarious position after already raising capital. The issue is PEP11 encompasses the area where BPH would deploy its CCS project.
BPH Energy clarified to shareholders that the project was subject to both state and federal government approval. Additionally, in the situation where federal and state levels are not in agreeance, the federal decision wins out.
Due to the erratic price and volume movements, BPH Energy received an ASX Price/Volume Query yesterday. Today's announcement addresses the queries made by the ASX.
Price query response
The company outlined its recent updates to the market that may have had an influence on the share price. Furthermore, the company noted there have been several media statements by the Joint Authority members, which includes the Federal Government Minister for Resources and the respective NSW Minister.
BPH Energy highlighted comments made by the Federal Minister Senator Hon. Keith Pitt MP on 12 February 2021, who stated that "A decision on Petroleum Exploration Permit 11 off the New South Wales coast" would not be delivered on that day and also indicated his "preference for the decision on the permit extension to be made soon."
In addition, Senator Pitt noted that detailed consideration would be given to the approval. This comment suggests there is potential the project may still be turned down.
The BPH Energy share price dropped by as much as 30% in intraday trade in response and closed the day down 24% at 16.5 cents.
