The value of coal seam gas (CSG) fields in the Gloucester Basin has been significantly downgraded.

A stock market analyst, with Credit Suisse puts the value of AGL’s Gloucester project at just $88 million, despite it having a book value of almost $350 million.

Director of Equities and Research Sandra McCullagh said until the government approves AGL’s application to frack 4 pilot wells at Waukivory the company faces risks.

She said the project might need more environmental safeguards.

“AGL at the moment has only had an environmental reference document,” she said.

“The concern is that they might have to go to a full environmental impact study which could take six to twelve months to do and really push back the timing of this project.”

Ms McCullagh said the value write-down is largely due to delays with government approvals.

But she said there is also always concern when communities oppose mining activity.

“This is really about what we see as the risk from strong local community opposition to this fracking project and the development of this coal seam gas field,” she said.

“We note that it is complicated by the proposal up in Gloucester to develop the Rocky Hill open cut coal mine very close to people’s houses as well.”