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 Protesters have also demonstrated outside Cuadrilla’s contractors and a few companies have withdrawn from work at Preston New Road.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. Fascinating statement
    “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”.”
    Define “great support”? Protest is not “illegal” it is a legal right.
    Perhaps The Symbol “!” Previously known as Cuadrilla have to blame someone for their losses to their shareholders, running to Teresa wont work any more she has enough on her plate. So who do they blame? Oh yes let it be the little old ladies and councillors who are defending their countryside, it MUST be their fault, it couldn’t possibly be the flock of financially incompetent chickens come home to roost could it?
    Honestly, what a mess? You couldn’t make it up? Dear dear how sad, never mind.

    • I love it when the antis write stories like this It helps give them the sense that they are winning something. And god knows that they could use some victories!

      They believe that because Cuadrilla lost $12mn or so, that the company is in desperate shape. They don’t comprehend that e&p exploration firms run constant losses until they have proven the commercial viability of their claim, and all of the owners anticipate this. Not only do they anticipate this, but Cuadrilla’s owners have very, very deep pockets and will continue to fund this work until successful because the prize is so large and the economics so compelling. Riverstone and Kerogen have deep pockets. Ditto for Centrica.

      Nope, poor finances won’t upend Cuadrilla. So what is there left for antis? Well, protests and court cases – that’s it. The court cases won’t win and they won’t delay anything, but they need to go through the motions because the antis have the opportunity. Protests may have slowed operations at first, but not so much anymore. The company is marching toward production and the antis are losing. When that gas begins flowing all will be lost. Residents will quickly realize that they’ve been conned by the antis. None of their dire predictions will prove true.

      The end is nearing.

      • “The end is nigh” Do you have a poster board and a holy o&g prophesy?
        I’ll let you into a little secret, its all in your head, the tory party doesn’t exist, it was all just a bad dream, no one will ever do anything as insane as fracking!

    • Cuadrilla are in no position to criticise what the anti fracking majority are doing.

      Cuadrilla do not do what they say they are going to do.

      Taken from Cuadrilla’s website regarding the Becconsall well.

      “In accordance with the planning consent well plugging and site restoration work WILL be carried out after the wintering bird’s season, ending 31st March 2016 and BEFORE THE DEADLINE SET BY LANCASHIRE COUNTY COUNCIL OF 31st OCTOBER 2016”

      No work at all started never mind finished during 2016

      Crystal clear proof of how the industry misleads communities.

      If they cannot afford restoration costs of 1 small failed project then they should not be operating.

  2. Protest is not “illegal”!! Once again FACTUALLY incorrect. When protestors are arrested for ILLEGAL activities by the police and prosecuted, I suggest it shows that some forms of protest is ILLEGAL. Someone obviously needs to check the LAW. Your group continuously try to use the law, so I suspect it is widely known that protest can be illegal and may explain why hardly a week goes by without arrests being made. That will not stop attempts at a persecution narrative, but with each arrest a statistic is produced which will mount up and come back to haunt you.

    I remember not so long ago a certain poster on here commenting on his disquiet concerning certain groups tagging onto this issue for their own objectives, and likely to adversely impact on the cause. Doesn’t take long for desperation to modify that stance.

    • Dear dear, such hysteria, and you do shout so? Smacks of desperation methinks? I repeat, as you were so very kind as to point out, i am quite happy to see, (i shan’t shout as you do), “legal protest” and you are quite wrong, protest is quite legal as is pedestrian priority on ancient rights of way, that is enshrined in common law and cant be overruled by this government or any other. legal protest is actually a democratic responsibility and a right recognised in law. I have said before that i cant condone the actions of blockading third parties, i see no difference to what i say now as then, so why do you go on and on and on so much about it? Do you think that strengthens your case at all? i assure you It does not. I still stand by what i said then and now.

      But as we all know, that its not the tiny harassed protest that is causing this financial mess for the symbol “!” formerly known as Cuadrilla is it? Overpaid executives, legal attacks on anyone who protests, paying off massive loans, not very successfully, sooner or later is was all going to hit the fan, and it has.

      All the frack farms agents crow on and on about how few protesters are present and how little and inconsequential the support to the opposition of fracking is, but then you lot go on and on and on in total hypocrisy, as you do now, that somehow by some minor miracle, it is this tiny group of protesters that are stopping this vast financially canny and astute corporation from making any profit?? Sheer delusional hypocritical fantasy isn’t it?

      You cant have it both ways? Either the symbol “!” formerly known as Cuadrilla are canny and financially astute and all powerful and all knowing, and have it all sown up, or they dont and they are a miserable failure? Which is it?

      Shouting and trying to dredge up irrelevant arguments wont help. Next thing you lot say is that it is all a massive conspiracy by the renewable energy producers to destroy fracking? I remind you of that little conspiracy theory in return. What utter bilge and detritus.

      My dear chap what Teresa May did, she did to herself and what the symbol “!” formerly known as Cuadrilla did to destroy their own profits, they have also done to themselves. But its just that like all bullies they cant be held personally responsible for the mess, oh, no, they have to blame it on someone else, and the protesters, that tiny inconsequential group (by your definition) are the obvious but spurious candidates to cover their embarrassment.

      Go figure.

  3. “We are also supported by a broad variety of business in Lancashire and the North West,” – but rather fewer than they were 6 months ago if their “Community Commitments Tracker” is to be believed.

    Assuming the CEO is the highest paid of the 2 remaining directors it looks as though Mr Egan had to take quite a pay cut last year – Ruth the report does show the highest paid director receiving $629,000 compared to $716,000 last year (a 12% reduction).

    I am struggling a bit to reconcile the statement from Mr Egan in the introduction “We have expanded the team considerably since relocating” with the information provided in the body of the report that Management and Support staff number decreased from 29 in 2015 to 23 in 2016. Have I missed something?

    • Perhaps he’s referring to Lancashire Police? They seem very willing to work for Cuadrilla and there is certainly a considerable number of them doing Francis Egan’s bidding. And he doesn’t even have to pay them – kerching!

  4. Oh dear PhilC. So everyone has been protesting legally, but just an anomaly for so many to be arrested!

    Go figure!

  5. What a strange argument over “protesting unlawfully”. Quite clearly, lawful protesting is legal, unlawful protest is not. The clue is in the wording i.e lawful or unlawful. Our judicial system is the ultimate arbiter of which is which, not the police. So how many protesters have been convicted of unlawful activity? How many have been charged by the police, but not convicted by the courts? The former are unlawful, the latter are not.
    The approximate 22% reduction in staff is not creating much of an uplift towards the 64,000 employed by the industry. There’s time of course, but that and right wing politics appear to be less on the side of the frackers than this time last week.
    It’s also rather fortunate for Cuadrilla’s balance sheet that most of the huge cost of security is being borne by the taxpayer.

  6. What’s this about Cuadrilla continuing to be “debut-free”. I’m no financial wizard who understands such mysterious terms. Is it a reference to their stage performance? Scarcely an amateurish cowboy show so far despite applause from some politicians in the audience.

    • Oh dear Martin, As Mike Potter rightly said……..arrest isn’t prosecution, wrongful arrest is harassment. So few prosecutions, most of those detained are just released without charge, and many of those who were charged were “inaccurately” reported by the police and that remains unproven if not vindicated entirely on the many videos, not good is it? Just intimidation really, much as we see on these pages.

      Some more info on TS!PKAC.

      http://www.telegraph.co.uk/business/2017/06/11/cuadrillas-cuts-costs-stem-losses-shale-project-faces-opposition/

      Go figure……

      I looked up Debut Free (as in Debut meaning first appearence) in the Financial times lexicon,

      http://lexicon.ft.com/Term?term=debut

      Definition of debut
      The first public appearance of a product or service, or the first time that it is available to buy.
      An occasion when a company issues (makes available and sells) shares, bonds etc for the first time.

      The usual double speak in other words.

      • Paul has just said it has been corrected to “debt free” I am not convinced that is absolutely true though is it? Perhaps that is another meaning of the phrase “debt free” i was not previously aware of? but of course i am quite sure they are telling the truth?

        • Great comment, Phil. The moon landing was faked, right? What about this whole round earth ploy? LOL.

          Yes, I’m sure that Cuadrilla would lie about its balance sheet to its shareholders. Happens all the time, right? “Shhhhh, let’s not tell shareholders about the pile of liabilities – they won’t notice and neither will our auditors!”

          Love it!

          • What are you talking about? Errr fracking is supposed to go downwards? Not upwards?Never mind, obviously too technical? No wonder nothing is being done, you are drilling in the wrong direction!GottaFixationWithLunarTricks. Perhaps that is uppermost in your mind, safely off planet I suppose? No reality to worry about there I guess, if that is preying on your mind, but not exactly relevant to the topic, or well, anything really?
            Better to keep your eye on the fracking non industry down here, if that is not too far below your moongazing of course?Fracking hasn’t even taken off let alone gone extra terrestrial?
            Maybe you should talk to the remaining Apollo astronauts and tell them you claim they didn’t go to the moon, I suspect Neil Armstrong and Buzz Aldrin will be overjoyed to disavow you of this and many other illusions?
            I am sure TS!PKAC have a slightly more earthbound point of view, in fact apparently entirely the opposite view you express so….oddly?
            I think you have strayed into fantasy frackland?

  7. The main thing is that progress is still continuing on site despite all the efforts by the anti frackers to stop it.
    Frackman has cost his loyal crowdfunders their hard earned cash. Notice there is no begging bowl out to fund the CoA action? That’s because he knows there is no appetite for anymore financial donations. And before anyone says it the funds raised last time have all been used up. Not so deep pockets after all!
    Btw why did no one point out that Ed Davey who is a big supporter of fracking has been reelected?
    There are literally a mere handful of anti fracking MPs that will have zero chance of preventing any legislation affecting planning rules from being passed.
    Corbyn is a has been already. Guarantee if it had been a centre right Labour leader they’d have done better. The left have to constantly shout to be heard and it creates an impression they are a larger group than they actually are. Exactly the same with anti frackers. They are a tiny group as evident in photos made up solely of NIMBYs and people that have fallen out of the system and find refuge in being part of any group that allows shouting and basically being a nuisance to society. These people have no chance of stopping us.
    Corbyn fans remind me of the kid at school that nowadays gets rewarded for coming last to make them feel good. I prefer winning.

    • It is irrelevant what Ed Davey thinks because his party will ban fracking. This was voted on and agreed by the party. He can of course defy the whip and abstain or vote against his party but Davey was elected as a Lib Dem and on their party manifesto, not because he may or may not support fracking.

      You will always have some MPs that have a different view on some matters within any party but it is the position of the party that counts. There are Conservative MPs opposed to fracking but the party position is to supports it. The fact remains that the Labour Party and all opposition parties want to ban fracking. And with a minority government in place the Conservative’s are not in a position of strength.

      • One of two things will happen. Libs will abolish their anti stance or he along with others will defy whip. Farron isn’t a strong enough leader to be feared. There are countless pro labour fans too.
        Gove is pro business when it comes to the environment.
        With Sinn Fein giving up their seats May with DUP has a larger majority in the commons than before election. I just don’t like shouting that out as it sounds like a pathetic Labour statement.

        • You should be writing for the Sun newspaper GBK. You’d be in good company there. They might even believe you.

  8. PhilC-you really do try and justify silly things. Yes, many are arrested and not prosecuted. It does not mean they have not caused an offence. It means in many cases it has been decided the costs of prosecution are not worth prosecution, especially when it is obvious that costs are unlikely to be recovered. The police achieve what they wanted ie. to get such individuals removed and Cuadrilla (and others) can get on with their work. Quite different from wrongful arrest. I am sure some will believe your narrative, and good luck to them if they become so excited that they get arrested, because I suspect, due to the current security concerns, the police and courts will start to become more focused on preventing the wasting of police resources.

    Separately, what is the excitement concerning Cuadrilla accounts? Does anyone really expect exploration for any resource to achieve an income until production starts? Cuadrilla have the funds to conduct this exploration, and if they didn’t plenty would step in with new funds. Just Giggle deep water oil exploration. Often £100m’s spent for no return, and they keep doing it. Wonder why?

    • Are you are still trying to be derogatory?…….derog-a-tory……hmmmmm, sounds about right? But how much does that matter? Not much, nor much evidence of anyone digging that expressed narrative either, though i am glad to see a much reduced volume.
      actually I don’t need to justify anything, the law regarding protest and pedestrian priority is the law regarding protest and pedestrian priority, its as simple as that.
      As far as i can see, the only one getting excited….the new word? around here seems to be in your post, i am just keeping it within the realms of reason and sanity.

      As regards the TS!PKAC accounts, well they are what they are, it doesn’t actually bother me one way of the other, its just a statement of fact, no more no less.

      Never mind, just keep digging.

    • True – the ludicrous Brexit thing knocked about that % of the value of the £ I suppose. That *would* explain that Hewes62

Add a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.