INEOS is extending its interests in shale gas under an agreement announced this morning with IGas. INEOS said the deal would make it the third largest holder of onshore oil and gas licences, with access to almost ¼ m acres of potential shale gas reserves.
INEOS will gain a 100% interest in a licence area around Grangemouth in central Scotland, which it currently shares with IGas. It will also get an interest in licences in north west England and the east Midlands.
A statement said under a farm out agreement, INEOS would pay IGas a cash sum of £30m. INEOS would also fund a work programme of up to £138m to appraise and develop the sites..
- INEOS will acquire IGas’ entire working interest in PEDL 133. Ineos currently holds 51% of the interest. A planning appeal for 14 wells at Airth and Letham Moss has been suspended during the Scottish moratorium on fracking applications.
North west England
- INEOS will acquire a 50% interest in IGas licences in Cheshire: PEDLs 147, 184, 189 and 190. PEDL 184 includes the IGas well at Ellesmere Port. PEDL 189 includes the IGas site at Duttons Lane, Upton.
- INEOS will acquire a 60% interest in IGas’s Bowland licences and become the operator. These are PEDLs 145, 193 and EXL 273 in the Greater Manchester area and Cheshire. PEDL 193 includes the IGas site at Barton Moss. PEDL 145 includes the IGas coal bed methane production site at Doe Green in Warrington.
- Ineos has the option to acquire 20% of PEDLs 012 and 200 in Nottinghamshire
Gary Haywood, CEO of INEOS Upstream, said: “This is a great opportunity to acquire some first class assets that have the potential to yield significant quantities of gas in the future. INEOS believes that an indigenous shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly. We are pleased to have agreed this deal with IGas. INEOS’s scale, asset position across the UK, US shale gas expertise, and our expertise in managing oil and gas facilities will be a great match with IGas’s existing onshore asset base, and significant exploration and production capability.”
IGas said the agreement gives it a total of up to $285m to spend across its shale gas licences areas and a work programme of 15 wells, flow tests and gas handling stations.
Andrew Austin, the CEO of IGas said: “This transaction, together with our existing partnerships with Total and GDF, reinforces the potential and materiality of our portfolio to world class counterparties and strongly positions us as we seek to work together to unlock the potential of our untapped natural gas resources in Britain.”
- INEOS expected to outline its shale gas community engagement programme at a press conference on Tuesday 17th March. The event is likely to involve INEOS director Tom Crotty, INEOS Upstream director, Tom Pickering, and Gary Haywood.