New Standard Energy enters liquidation, with clean-up costs in question

A Kimberley-based energy company has gone into liquidation, leaving uncertainty around who will pay the estimated $1.9 million in clean-up costs.

New Standard Energy is an onshore hydrocarbon exploration company seeking to tap the Canning Basin trove with four existing wells in the Kimberley.

The liquidation of NSE, led by Beijing-based CEO Xiaofeng Liu, comes as no surprise to the energy players, with a decade of slow financial decline heightened by unplugged wells and dry assets.

In 2019, NSE was delisted by the ASX after the company was suspended for not having funds to decommission five of its exploration wells and an airstrip.

The Department of Mines, Industry Regulation and Safety revealed soon afterwards the cost of plugging existing wells would be around $1.5m.

NSE was handed over to liquidators last month, leaving the clean-up obligations to DMIRS and, potentially, taxpayers.

Anti-fracking group Lock the Gate Alliance WA spokesperson Simone Van Hattem said the group had long warned the Government fracking companies could go bust and force the public to pay for the environmental damage in their wake.

“Fracking is a high-cost operation, particularly in areas as remote as the Kimberley. It’s no surprise New Standard Energy has gone bust with little cash left to clean up its mess,” she said.

“Giving small-cap fracking companies access to vast swathes of fragile country in the Kimberley now, as the world moves away from fossil fuels like fracked gas, only heightens the risk of WA taxpayers footing the bill to clean up their mess in the future.”