Regulatory Blow for Bounty as PEP 11 Permit Refusal Threatens Offshore Growth

PEP 11 Permit Refusal: A Significant Regulatory Hurdle

Bounty Oil & Gas NL (ASX: BUY), alongside joint venture partner BPH Energy Limited (ASX: BPH), has encountered a notable regulatory setback with the refusal of its Joint Venture Applications for the PEP 11 permit. The National Offshore Petroleum Titles Administrator (NOPTA) issued the refusal notice on 17 January 2025, marking a critical juncture for the offshore Sydney Basin project.

The PEP 11 permit, which grants exploration rights in a potentially lucrative offshore area, will continue in force for only two months from the date of the notice. This limited extension provides a narrow window for Bounty and its partners to respond or seek alternative pathways to maintain their stake in the permit.

Legal Review: Navigating Uncertainty

In response to the refusal, Bounty has confirmed it is pursuing legal advice to explore a review process under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. This move signals the company’s intent to challenge the Joint Authority’s decision, though the outcome remains uncertain. The legal review could potentially restore or reshape the permit’s status, but it also introduces a period of regulatory ambiguity that investors will watch closely.

CEO Philip Kelso’s authorization of the announcement underscores the company’s commitment to transparency amid this challenge. Bounty’s strategic interests in PEP 11, where it holds a 15% direct interest, are part of a broader portfolio that includes producing and exploring assets in the Cooper/Eromanga and Surat Basins in Queensland.

Broader Implications for Bounty’s Growth Strategy

The refusal impacts Bounty’s growth trajectory, particularly its ambitions in high-impact offshore exploration. While the company generates modest gross oil revenue of approximately A$1.6 million annually, the PEP 11 permit represents a significant opportunity to expand its resource base and production capacity.

In addition, Bounty’s interests in Western Australia and other Australian basins diversify its portfolio, but the PEP 11 setback highlights the regulatory risks inherent in offshore exploration ventures. The company’s next steps, including the legal review process, will be pivotal in determining whether it can overcome this obstacle or if it must recalibrate its exploration focus.

Investors and analysts will be keen to monitor updates on the legal proceedings and any subsequent decisions by NOPTA or the Joint Authority. The evolving regulatory landscape for offshore petroleum exploration in Australia continues to pose challenges that require strategic agility and robust stakeholder engagement.