UK's IGas Expects 1st Shale Spud Early 2018

UK independent IGas said in a results statement September 20 it is making “good progress” on its East Midlands shale gas acreage.

It expects spudding of its first shale gas well in early 2018, having received planning consent for three wells in the north Nottinghamshire area, where it is operator. That's slightly later than a 4Q2017 start date announced this June. IGas did not request, and does not have, permission to frack there. 

“Encouragingly, there is a significant level of activity onshore UK, and over the next 12 months, the industry is expected to have over half a dozen operators either drilling or flowing wells, including a number from IGas,” said the company’s CEO Stephen Bowler.

“At the peak of North Sea production we [the UK] were net exporters of gas, but we now face future import dependency levels of up to 80% by 2035 if we are unable to address our supply challenges,” the company's statement added: “Half a million jobs are secured in [the UK] by using gas as a raw material….  For the foreseeable future our homes, businesses and industries will need gas.”

IGas moved from a £25.2mn loss in 1H2016 to an £8mn profit in the first half of this year, helped by a £8.8mn tax credit in 1H2017, as net production (from its conventional UK fields) remained stable at 2,326 barrels of oil equivalent per day.

Private equity fund Kerogen Capital now a 28% shareholder in IGas, following its $35 (£29) million equity investment in April 2017. Net debt was slashed to £7.2mn at end June 2017, contrasting with £99.6mn six months and £83.5mn 12 months earlier.

Igas noted that the March 2017 completion by another shale explorer Ineos of onshore UK shale acreage held by French utility Engie means that obligations held by Engie -- to carry IGas costs in respect of all licences (other than PEDL 293 and PEDL 295) -- have now been taken over by Ineos. 

Ineos retains injunction

Separately, an attempt by a campaign group to overturn an injunction secured July 31 by Ineos against protests at its drillsites was renewed at the High Court in London September 12; lawyers for the campaigners say a further hearing on the matter will take place at a date to be confirmed in November.

Mark Smedley