Shareholders of energy junior Metgasco have voted in favour of accepting the NSW government's $25 million offer to buy back three exploration licences following a local backlash.
The company said holders of nearly 152.5 million shares voted in favour, while 108.6 million shares voted against, putting the seal on ending the company's long-running dispute with the state over its licences.
"The hurdles for development are only getting harder, not easier," chairman Leonard Gill told shareholders at an extraordinary general meeting on Wednesday to consider the compensation offer.
"The board's decision to recommend acceptance of the proposal has been based on whether it is likely to exceed the value of pursuing our previous strategy for our exploration licence activities and court action for damages," he said.
At the meeting, the board was questioned by shareholders on the settlement with the state government, and whether it had received the best offer possible.
The NSW government has offered $25 million to compensate Metgasco in exchange for cancelling the three licences and the company withdrawing its development application following a local backlash.
Metgasco and the government will also settle their legal battle over the unlawful suspension of a controversial drilling approval at its Rosella well in Bentley, near Lismore in the state's north.
Metgasco had threatened to sue the government over the licence suspension in 2014, which came just days before thousands of protesters were expected to blockade the site.
The Supreme Court in April overturned that decision, paving the way for Metgasco to seek compensation and push ahead with its drilling plan.
The deal is part of the government's petroleum exploration licence buyback program aimed at reducing the footprint of possible coal seam gas (CSG) activity from 60 per cent of NSW to less than eight per cent.
Metgasco now plans to undertake a share buyback up to 10 per cent of the its capital in the first quarter of 2016.
Earlier, managing director Peter Henderson said the company planned to use the $25 million compensation to acquire oil and gas assets from distressed sellers.
"It is our expectation that in the first six months of 2015, distressed sellers will continue to bring assets to the market," he told shareholders at the company's annual general meeting that immediately preceded the EGM.
"There are many approaches we will consider, from acquisitions, to farm-ins and mergers."
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