Oil and gas company Linc Energy has been placed into administration in a bid to avoid penalties for polluting the environment.
Last Friday it was announced administrators PPB Advisory had been called in to work with Linc’s management on options including a possible restructure.
After receiving legal and financial advice and considering commercial prospects, the board decided it was in the best interests of the company to make the move.
The announcement comes one month after the company was committed to stand trial on five charges relating to breaches in Queensland’s environmental laws at its underground coal gasification site.
The state’s environment department accused the company of wilfully causing serious harm at its trial site near Chinchilla on the Darling Downs.
If found guilty, the company could face up to $56 million in fines. However, a report by not-for-profit law firm Environmental Justice Australia has found mining companies are using legal loopholes to delay or minimise their rehabilitation obligations.
Linc Energy argued the case against it was circumstantial and that it is innocent.
Administrator Stephen Longley said they were focused on working with Linc to review the company’s operations and assets in Australia and the United States.
“We are confident that upon completion of this review, we can work towards establishing a deed of company arrangement that has the potential to facilitate a future restructure of the business,” he said.
– ABC News