Industry

Cuadrilla accounts: Losses continue as CEO condemns “irresponsible and intimidating” activists

Balcombe,West Sussex, UK Anti Fracking protests..16th September

Photo: David Burr

Cuadrilla has accused some of the opponents of its shale gas operations in Lancashire of “irresponsible and intimidating behaviour”.

Writing in the annual accounts, chief executive, Francis Egan, said the company enjoyed “great support” in the county but a small minority were “protesting unlawfully”.

The accounts for the parent company, Cuadrilla Resources Holdings Ltd, showed a loss of $11.6m for the 12 months to the end of December 2016. This was smaller than the $17.5m loss in 2015 but almost the same level as the loss in 2014.

Revenue was down in 2016 to $12,000, from $219,000 in 2015, with the continuing decline in the well services business. But operating expenses were also down, as were staff costs and the net cash outflow from operating activities.

Cuadrilla’s subsidiary companies operating in Lancashire and southern England also reported losses.

pnr 170601 Frank Hill 1

Conductor rig at Preston New Road, Little Plumpton. Photo: Frank Hill

During the period of the accounts, the Communities Secretary, Sajid Javid, overruled Lancashire County Council’s refusal of planning permission for drilling, fracking and testing up to four shale gas wells at Preston New Road, near Blackpool.

Within days of the end of the company’s financial year, Cuadrilla began construction work at the site. Since then, there have been regular protests outside the entrance and multiple arrests. Protesters have also demonstrated outside Cuadrilla’s contractors and a few companies have withdrawn from work at Preston New Road.

In the accounts, Mr Egan, said:

“We continue to enjoy great support from people in Lancashire who see the potential for the economic benefits and jobs from the responsible development of a shale gas industry in their county.

“As expected we have also heard from those who remain sceptical at this early stage of exploration and sadly a small minority are choosing to make their protest unlawfully.

“We continue to engage closely with the Lancashire Police Force to ensure our operations are not impeded and, as importantly, that the daily routes of local people are not impacted.

“We are also supported by a broad variety of business in Lancashire and the North West, working closely with us on the operations, and these businesses remain engaged and undeterred despite the irresponsible, intimidating behaviour of a few activists.”

Cuadrilla’s plans

Mr Egan said the company planned to drill two horizontal exploration wells during 2017, the first of their type to be drilled into shale rock in the UK.

Fracking would be carried out towards the end of this year, he said, and well testing in the first half of 2018.

Since the report was written, the Court of Appeal has said it will hear two challenges against the granting of planning permission for the Preston New Road site.

Mr Egan said:

“Cuadrilla remains confident that the positive recommendation of the planning inspector, the decision to grant planning consent by the Secretary of State and the subsequent ruling by the High Court in respect of the PNR site will not be overturned.”

He also said communication and engagement with the local community remained a priority for the company. It planned to provide what he called “live streamed site visits” on the internet to share what was happening at the site.

Ownership

The accounts said Cuadrilla continued to be debt-free and financed by its shareholders:

45% A J Lucas, the Australian mining group

45% Riverstone Holdings, a private equity investor

10% Cuadrilla employees and former employees

Key figures

The group has seen a steep fall in revenue in the past two years. In 2014, revenue from the well services business, including rig hire, was $5,174,000. It fell to $219,000 in 2015 and was listed as zero in 2016.

The 2016 accounts identified a fall in staff numbers and the salary of the highest paid director.

Cuadrilla Resources Holdings Ltd

Loss for the year: $11,542,000 (2015: $17,671,000

Revenue: $12,000 (2015: $219,000)

Gross profit: $12,000 (2015: $185,000)

Operating expenses: $6,668,000 (2015: $9,678,000)

Administrative expenses: $5,037,000 (2015: $7,815,000)

Net assets: $35.6m (2015: $39.5m)

Operating loss: $11,693,000 (2015: $17,678,000)

Net cash outflow from operating activities: $7,410,000 (2015: $10,604,000)

Proceeds from issue of share capital: $7,568,000 (2015: $4,062,000)

Staff: 23 (2015: 29)

Salary of highest paid director: $629,000 (2015: $716,000)

Staff costs: $3,890,000 (2015: $5,907,000)

Directors emoluments: $1,010,000 (2015: $1,515,000)

No political donations were made in the current or previous year

During 2016 company issued total share capital of $7,568,000 to existing shareholders. Since then, in April and May 2017, the company issued share capital totalling $2,002,000 to existing shareholders.

Recharge of operating costs to A J Lucas: $2,528,000 (2015: $762,000)

Other companies

Cuadrilla Resources Ltd

Loss for the year: $4,406,000 (2015: $1,393,000)

Revenue $2,582,000 (2015: $5,033,000) – management fees provided to subsidiary companies

Management staff 23 (2015: 27)

Total payroll costs $3,890,000 (2015: $5,138,000

Directors emoluments $1,010,000 (2015: $1,687)

Loans to subsidiaries $4,071,000 (2015: $840,000)

Cuadrilla Balcombe

Loss: $151,000 (2015: $269,000)

Management fees: $34,000 (2015: $72,000)

Non-cancellable operating lease rentals: $27,000 (2015: $20,000)

Recharged operating costs to Lucas Bolney Ltd: $39,000 (2015: $64,000)

Cuadrilla Elswick

Loss: $1,637,000 (2015: $2,590,000

Management fees: $559,000 (2015: $2,053,000)

Non-cancellable operating lease rentals: $180,000 (2015: $230,000)

Cuadrilla Bowland Ltd

Loss: $3,960,000 (2015: $3,211,000

Management fees: $1,850,000 (2015: $2,749,000)

Operating leases $48,000 (2015: $17,000)

Cuadrilla Well Services Ltd

Loss: $2,998,000 (2015: $9,666,000)

Revenue: $0 (2015:218,000)

Operating expenses: $252,000 (2015: $6,101,000)

32 replies »

  1. Rex-it is an enjoyable occupation to see how easy it is to move some from an agenda of excitement to an agenda of incitement.

    The real focus should be on Qatar, and what will happen to our supplies of gas, and what action will be taken to protect supplies.That has just added a large amount of value to the “real estate” at PNR, but some seem to want to focus on Cuadrilla accounts!

    For those who missed it, Egdon and Igas just added to their “real estate”, in spite of their accounts.

    Anyway, I will leave you all in peace now for a while as I have to go off line whilst my cave is refreshed!

  2. It’s still lose lose for the frackers (Martin et al). Let’s say there was no protesting and the police were redeployed to actually enforce the environmental regulations as specified by the EA. Cuadrilla/Ineos wouldn’t survive that with any profit margins. They might as well just pack up and go home. We would respect that decision as the most sensible course of action (no more mocking – I promise).

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