Oil and gas companies operating more than 40 onshore oil and gas licences face losing at least part of their acreage at the end of this month.
A group of licences issued in 2008 come to the end of their first term on 30 June 2016.
Under a requirement of the Petroleum Exploration and Development Licence (PEDL) operators must complete their work programme and give up half their licence area if they want to continue to a second term. Details
Where operators have not completed their work programme the Oil and Gas Authority (OGA), which oversees licences, may refuse a second term and the licence is given up.
According to data from the OGA, 45 licences are coming to the end of their first term this month. They are in the East Midlands, North West England, South Wales, Yorkshire, central Scotland and the Weald basin.
They include key licences, such as PEDL165. This is held by Cuadrilla in the Fylde, where the company wants to frack for shale gas at Roseacre Wood and Preston New Road.
The licences affected are held by 21 operators.
More than a third (17 out of 45) are held by IGas or its subsidiaries (Dart Energy and GP Energy).
Companies run by Gerwyn Williams in south Wales hold six of the affected licences.
The work programme of a licence usually includes a commitment to drill at least one well in order to go to the next term.
Celtique Energie faces losing its licences in the West Sussex Weald (PEDLs 231, 234 and 243) because it has not yet drilled a well.
A total of 30 wells were drilled in the affected areas since the licences were issued in 2008. But all the wells were in 19 licences and no wells were drilled in the remaining 26.
The number of wells includes sidetracks or deviated wells. For example, the wells in the Weald were Balcombe 2 and the sidetrack 2z.
Extended first term and notice period
All the licences initially had a first term of six years. But the government extended the term for a further two years under a Deed of variation. Example here: PEDL189 executed Deed of Variation to increase the Initial Term for 2 years (1) The second terms were shorted by two years and are still due to expire in 2019.
Operators which want to move to a second term must give the OGA one month’s notice of the end date. That notice period ended this week on 31 May 2016.
We asked Cuadrilla whether it had given notice to the OGA of its intention to proceed to a second term, and which area of PEDL165 was it proposing to surrender.
A spokesperson said:
“Cuadrilla can confirm that it has written to the Oil and Gas Authority regarding the second term of its PEDL 165 licence”.
But the spokesperson would give no further details. We have also put questions to the OGA on this issue but received no response. We’ll update this post when we do.
Demand for answers
Campaigners against fracking in Lancashire have written to the OGA and the Fylde MP, Mark Menzies, asking whether Cuadrilla had fulfilled its obligations under the licence and can go forward to a new term.
John Powney, speaking for Frack Free Lancashire, said there must be no negotiation. If Cuadrilla have not met its obligations, it should lose its licence.
“If they have given due notice, the legal agreement requires them to give up half their licence area. The people of Fylde need to know whether their homes are within that relinquished part.”
“We would oppose strongly any attempt to relicense that area.”
Full list of affected PEDLs and operators
DrillOrDrop compiled this post using the following sources:
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