One of the biggest potential players in UK onshore fracking has said it is giving up its shale gas licences.

Star Energy, formerly IGas, announced today:

“Our intention is to exit our shale gas licence positions in order to save the costs of licence fees and to allow greater focus on our producing assets.”

In 2015, Star Energy was granted five shale gas licences, the third largest number after Ineos and Cuadrilla.

The company also held older licences in Nottinghamshire, where it explored for shale gas and attracted frequent protests.

It drilled shale gas wells at Misson and Tinker Lane, both of which have now been plugged and abandoned and the sites restored.

In March 2023, as IGas, the company announced it had cut the value of its shale gas assets by £30m. At the same time, it confirmed it would not take legal action against the UK government over the reinstatement of the fracking moratorium in October 2022.

Five months earlier, it said “we reserve the right to pursue any legal process available to us to recover the losses that we have incurred”.

In today’s trading update, Star Energy’s new chief executive, Ross Glover, said recent refinancing had given the company the opportunity to:

“reinvest some of our operating cashflows into our oil and gas business to drive its profitability and sustainability, in a range of commodity price environments”.

Star Energy has 26 UK onshore oil and gas fields, which are in formal production. But five of these are not currently extracting hydrocarbons.

The company is the second biggest UK onshore oil producer. But its total monthly production is a long way behind the leading company, Perenco.

In March 2024, the most recent month for which data is available, Star Energy extracted 18% of the UK onshore oil total. In the same month, it was the fourth largest UK onshore gas producer, extracting 0.2% of the UK onshore total.

The update, in advance of today’s AGM, also described geothermal energy as potentially “a key part of the solution to decarbonise heat”.

Mr Glover said:

“The skills needed to develop the geothermal industry already sit within the onshore oil and gas industry in the UK – this could be a real “just transition” for oil and gas workers to a green technology that is proximal in terms of skill set.”

He said geothermal “fits perfectly” with Labour’s plans for GB Energy, a publicly-owned clean energy company.

Star Energy currently has proposals for geothermal schemes in Salisbury, Stoke-on-Trent and Greater Manchester.

Mr Glover also said he would be working to “right-size” the business and ensure it had the “optimal corporate structure” that was “appropriate for a business of our size”.

DrillOrDrop has closed the comments section on this and future articles. We are doing this because of the risk of liability for copyright infringement in comments. We still want to hear about your reaction to DrillOrDrop articles. You can contact us by clicking here.