Anti-fracking campaigners criticise shale company over delayed accounts

Third Energy

Opponents of shale gas extraction in North Yorkshire have urged Third Energy to publish its accounts on time.

The company, which has permission to frack its KM8 well at Kirby Misperton, has been threatened with dissolution over late submission of its financial records.

Accounts for Third Energy UK Gas Ltd for the year to 31 December 2015 were due at the end of September last year. (See DrillOrDrop’s post What didn’t happen in 2016)

On 6 December 2016, the company was warned that it had until 6 February or face being struck off the companies’ register and dissolved.

This is the second time Third Energy has received a compulsory strike-off notice from Companies House. Another warning was issued in January 2013.

Third Energy told DrillOrDrop:

“The 2015 accounts are in the process of being finalised. The company, and others in the Third Energy Group, have always and will continue to file their accounts in the proper manner.”

Ian Conlon, of Frack Free Ryedale, said:

“We call on Third Energy to come clean on their financial health and conform with regulations that they submit their accounts on time.

“Given the significant financial difficulties faced by other operators possessing licences to frack, such as IGas, we hold grave concerns about the ability of these companies to operate such risky technology responsibly and safely when faced with such financial pressures to cut costs.”

The late filing was spotted by Russell Scott, of Frack Free North Yorkshire. He said:

“It is only by shining a bright light to the way this and other companies operate, that we can see that we cannot trust them to finance either safe working practices or the clean up afterwards when things go wrong.

“Scores of fracking companies in the US have gone bankrupt leaving a bitter legacy of polluted drinking water and poisoned soil for communities and local authorities to clean up.”

In the High Court last year, Frack Free Ryedale and Friends of the Earth said Third Energy should be required to pay a financial bond to deal with any problems in case it went out of business. But their argument was rejected by the judge, Mrs Justice Lang.

Campaigners said today they suspected Third Energy decided to file its 2015 accounts late to avoid revealing losses before the court hearing. Third Energy UK Gas Ltd lost more than £4m in 2014 and more than £11m in 2013.

Sue Gough, who lives in Little Barugh, half a mile from the fracking site, said:

“With such huge health concerns associated with fracking, and the enormous costs associated with the disposal of potentially 1/2 a million gallons of waste water per frack, I am deeply concerned that the company appears unable or unwilling to publicise its finances. Do they have something to hide?”

5 replies »

  1. Do Third Energy have something to hide? Hell yes!
    And this is what it comes down to in the end, can Third Energy be trusted?
    Hell no!

  2. Fracking is in debt worldwide , those who are making any money are doing so at the expense of investors who seem oblivious to the fact that this industry is nothing more than a PONZI scheme . The great fossil fool crash is on the way .

  3. No they are not hiding losses they are trying to hide taxes. All shale companies are producing good losses and take a beating over the last 3 years. Just make one wonder why the are still around taking more punishment.

  4. Ponzi or not this certainly seems to call into question the assurances given regarding bonds for abandonment by the likes of Ken Wilkinson.

    Here is Ken commenting on the question of Third Energy and bonds in the Yorkshire Post just over a year ago:

    “If Third Energy go broke this is all covered by a bond. They are required for licencing.”

    When questioned on this extremely dubious statement (I know the moderators don’t like the L word) he responded:

    “Regarding financial bond, the EA are satisfied. Pls see chapter 6.3” (of the EA’s draft decision document) )

    Section 6.3 actually says:

    “Financial competence and relevant convictions
    We are satisfied that sufficient financial resources are available to the Operator to ensure compliance with the Permit conditions.
    The Operator does not have any relevant convictions and is considered to be technically competent.”

    So it seems Ken’s claim about a bond existing and being required by licencing wasn’t in fact sustainable with any evidence. (There isn’t one is there? It’s such a pity we can’t complain to the ASA about deliberately misleading statements Ken makes in comments pages isn’t it? LOL)

    So the EA are presumably reliant on information from company accounts to determine their approval, but how on earth can the EA continue to be satisfied when the company delays filing its accounts for months to the extent that it receives a second strike off warning, and why are the EA not making a huge fuss at this point?

    Is this really the gold-standard regulation we keep being told exists?

    • Your right – no financial bond exists between Third Energy UK gas ltd and the EA. The same goes for DECC.

      Furthermore DECC could have requested a parent company guarantee from the ultimate owners Barclays, but didn’t and decided to accept one from Third Energy’s holding company based in the Cayman Islands instead. (Another poor decision).

      This concern was raised by a lot of people, but was ignored by North Yorkshire County council who could have enforced a financial bond, but decided not too!

      Another fine example of the UKs ‘gold standard’ regulations.

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