Industry

Breaking: Cuadrilla sells operation of Balcombe licence to Angus Energy

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

Cuadrilla tanker at Balcombe in 2013. Photo: David Burr

Angus Energy announced this morning that it would become the operator of Cuadrilla’s Balcombe licence in West Sussex, after acquiring a 25% stake.

The deal, which depends on consent from the Oil and Gas Authority, will cost Angus £4 million and will require additional sources of capital, the company said.

In a statement this morning, Angus said it would carry out and pay for tests on the oil flow in the Balcombe well, approved earlier this month by West Sussex County Council.

Cuadrilla drilled its Balcombe well in summer 2013, prompting three months of protests. But it ran out of time under the planning permission to test the well and no operations beyond maintenance have been carried out since then. Cuadrilla is currently preparing for horizontal drilling at its shale gas site at Preston New Road in Lancashire and a public inquiry over refusal of planning permission at a nearby site at Roseacre Wood.

Cuadrilla’s chief executive, Francis Egan, said:

“Following the approval of our planning application to flow test and monitor the existing horizontal exploration well at Lower Stumble we are delighted to form this new partnership with Angus Energy, an existing and successful operator in the area. This agreement will enable the testing works to be undertaken in a timely way and to the highest standards, whilst we continue to also focus on our shale gas operations in the North West.”

Angus currently operates licences and sites at Lidsey in West Sussex and at Brockham in Surrey.

Earlier this month, the company said it would be producing oil from two wells at each of these sites in the first quarter of this year (DrillOrDrop report). But there’s disagreement between the company and Surrey County Council over whether there is planning permission to drill or produce from one of the Brockham wells.

Under today’s agreement, Angus has acquired interest in the Balcombe licence, PEDL244, from both Cuadrilla and the other investor in the licence, Lucas Bolney Ltd, a subsidiary of the Australian mining group, A J Lucas.

Angus Energy’s Managing Director, Paul Vonk, said in the statement:

“This transaction complements our existing asset base and aligns with our goal of enhancing shareholder value. This joint venture is an important milestone as we execute our business plan. Both the new partnership and Cuadrilla’s and Lucas’ recognition of Angus Energy’s ability to manage and execute operations in a safe and efficient manner at Balcombe are gratifying to our entire team.

“We are also looking forward to the near term testing of Balcombe-2Z horizontal well as it will further add to our knowledge base and understanding of the Kimmeridge layers.”

The statement said Angus would:

“commence a fully approved well test program of the Balcombe-2Z horizontal well at the earliest opportunity. Angus Energy will also establish a local Community Liaison Group and contact local residents, at the appropriate time, before work commences.”

Balcombe

Opposition in Balcombe to Cuadrilla’s 2013 operations. Photo: DrillOrDrop

According to the statement, Angus will pay £2m, less a £150,000 advance payment, within 20 working days of 20 January 2018. It will pay another £2m following consent from the OGA. Angus said it “was reviewing several financing options” and was “in the final stages of selection”.

The statement said Angus would conduct the well test programme with the following objectives:

  • Measure the well flowing production rates for oil and natural gas
  • Measure flowing bottom hole and wellhead well pressures
  • Determine the gas oil ratio (GOR) of production from the well
  • Collect and analyse well oil, gas and water samples
  • Measure and record well shut-in bottom hole pressure over approximately one month.

Angus said the test programme would “require minimal preparation” because the well was ready for testing.

A presentation for investors, also published today, said Kimmeridge limestone layers at Balcombe were thicker than Brockham and the exploration well at Horse Hill, near Gatwick.

180122 Angus Energy presentation on Balcombe

Extracts from Angus Energy presentation for investors, 22 January 2018

The only liability for PEDL 244, the company said, was for restoration of the Balcombe site, estimated at about £200,000.

If the agreement is approved, ownership of the licence will change from 75% Cuadrilla and 25% Lucas Bolney to £56.25% Cuadrilla, 25% Angus Energy and 18.75% Lucas Bolney Ltd.

Last week, A J Lucas announced it was looking to raise A$22m partly to fund horizontal drilling and hydraulic fracturing at Preston New Road. The company said Cuadrilla had incurred additional costs in drilling the first vertical well at the site because of “unforeseen weather and technical issues delaying the drilling timetable”.

39 replies »

  1. Oh dear , the company behind all the disputes with SCC are going to try to go to the one place that will find the most resistance , Balcombe .
    I don’t fancy their chances there tbh . More placements to raise funds?

  2. Many Balcombe resident’s will welcome Angus Energy as we did Cuadrilla ! We are not all NIMBY-HYPOCRITES who use Oil-Gas-Electricity-Petrol-Diesel-Planes-Cars-Transport etc….And protest about Oil extraction !!! We who support Oil/Gas extraction do not have a problem with this…just the RENT A MOB who invaded a peaceful Village for a four month FREE HOLIDAY in the summer of 2013.

    • Do you breathe clean air? Do you drink clean water? Do you eat uncontaminated food? Do you live in a, relatively, unpolluted environment? Do you live on a planet that is full of life and health? Do your family enjoy the sunshine and play on grass and beneath trees? Do birds and insects still fly in the unpolluted air? That is the legacy that your precious oil and gas oiligarchy seeks to destroy, there are fuel and energy technologies that have been supressed and sidelined by your precious industry, we don’t need oil and gas anymore, we haven’t needed it for over a century, just because technology has been supressed don’t imagine for one moment there will not be a reckoning. To deny that to your own family and others, that is true hypocrisy. It is the fracktivist rentamob hired thugs that invade our countryside and spit and curse at people who are protecting everyone, even you and your family from being plunged into a burnt out fracked wasteland husk of a planet that your children’s children will curse you for allowing.
      The rentamob numbnuts invading unwanted Hypocrisy is all theirs, and by association, yours. Wake up.

      Time is up, game over, the fraud of the oiligarchy is well known now, nothing will jam those fracks back in the bag. You are either part of the solution, or part of the problem, get a real life and be part of the solution.

  3. Oh dear. The previous comments by the antis that Cuadrilla were too stretched to complete their work at Balcombe are starting to look a tad premature. It was pointed out at the time that other investors could take all, or some, of the risk/reward.
    By the way, Balcombe is in West Sussex! (That’s not simply being pedantic-it is quite “valid”.)

  4. Why shocked Vera? If you look at their Brockham site in Surrey that’s what they are about to produce, with the gas generating electricity for the Grid.
    I think you will find many of the tests in the Weald have shown presence of oil and a little gas. If you scuba dive around the Kimmeridge oil field you can see gas bubbles coming off the sea bed. In this case, I would suspect the gas will not be that much but if it is there and can be utilised the same way as intended at Brockham, seems pretty sensible. Bit like a household selling surplus electricity back to the Grid from solar panel output!

    • He knows that. Brockham is in Surrey. Surrey County Council indulgently allowed Angus to apply for retrospective planning permission for a side track they drilled without planning permission. Seems Angus screwed up the application? Or so I hear.

    • Maritin, Angus will be resuming the measly production from BRX2Y, which they deemed uneconomical before and hence shut in the well. They will not be producing from BRX4Z anytime soon. They’re not even applying for production.

  5. This is bad news for Cuadrilla investor as Angus is not a major player. They don’t have the capacity to develop the asset. Or maybe the prospective isnt great thats why Cuadrilla sold out.

    • TW
      The Weald is not major player territory I expect, even if the wells produce a few thousand bbl a day. Too much like hard work. Best extract oil where there is no local,opposition I guess.

      However, Angus are into well testing at present, as are UKOG,so it’s a fit, gushing oil or not.

      The question is, what do they know that makes them do happy to be in the game, given the lack of really good news from UKOG so far?

      • You made good point there. £4mil is not a small sum for a small player like Angus which has a market cap of only £25mil (1/4 of the company value). So they didn’t buy in without looking at their well data at Brockham and Horse Hill. Even if this could produce only 1000bbl/day then it is a damn good buy in for them. $60/ bbl at capex $30/bbl at 1000bbl/day flow rate is pretty handy cash flow. But I doubt long term flow would be that 1000bbl. Wpuld be more like 100 or 200bbl/day.

        • It’s clear from their presentation on Balcombe http://www.angusenergy.co.uk/wp-content/uploads/2018/01/Balcombe-Presentation.pdf that they are targeting the shale, that the limestone is a ruse to get stuck in without having to use the F word, or abide bu the (weak but annoying) regulations that would come with shale. ‘Clear’ is the wrong word. There is semantic play around the word ‘Kimmeridge’, a looseness of use, that is tending ever more toward, but not quite, admission that the end game is fracking the shale.

        • [Edited by moderator] Trying to intimate that there’s a 1,000 bopd etc. It’s a dirty game is life on the aim. Don’t be fooled by posters such as the above. They said the same about Lidsey 1200bopd now they’ve got 20 bopd net to ANUS. Uneconomic!!! Not too mention the ecological/enviromental problems and the disruption to local people. All for what 20bopd? More oil in the Penines than there is at Lidsey Brockham Balcombe. It’s all a big CHARADE to sell their freebie shares to the MUG retail punters…

          • If you look at Angus seismic presentations will show both Lidsey and Brockham well sit on the edge of the basin where the oil bearing rock is thinner. Thus it explains the low flow rate. Better comparison is to the Horse Hill well which has similar thickness and produce 1000 bpd.

            • Rubbish Horse Hill never ever flowed 1,000 bopd. They ran a 7 and a half hour IP Then extrapolated it by multiplying it with 24 hours. IPs should run for a minimum of 30 days. Standard industry practice. Of course the oil that came from kimmeridge came from a trapped zone within the kimmeridge and from the other geological formations. (Professor Smythe) That’s how they skanked the numbers. UKOG, ANGS all about orchestrated pump & dump of their corporate shares they’ve made hundreds of millions at it, while causing fear, distress and alarm to local residents who’ve been treated shockingly, then there’s the ecological and enviromental damage……. Awful, simply awful… Both should be closed down. Back door frackers!!!!

            • TW

              Yes … it is interesting stuff. It’s also getting near to the end of Jan, so we should get some information from UKOG. Cue some interesting posts, no doubt.

          • Daniel Levi

            My point was that, even if it were 1000bbl the majors would not be interested.

            I will leave ramping and de ramping and haste to misunderstand to the bulletin boards. Best not believe much that you see on them and DYOR.

    • Firstly this is Ian R Cranes tribute today: And I said I wouldn’t do this anymore! Just could not resist as everything is relevant.

      ( https://m.youtube.com/watch?feature=em-lbcastemail&v=e4wJ6lFMc4g )

      In the best tradition of Angerus rhetoric, lets have a little fun with this shall we?
      Is this not Laughable! Dont you just love it? Not so Musical Chairs to the tune of Laurel and Hardy’s cuckoo!
      Cuadrilla chickens out and who is stupid or crazy bewildered enough to still be standing when the wonky chair is vacated and still be willing to sit in the dunces seat for a dead duck project that can only lead to disaster for everyone when the music stops?
      Why if it isn’t that well known joke on a stick Angerus the Unwieldy, clown of the show, joker in the pack? Purveyor of childish remarks rather than answer a direct question? Obfuscator and claimer of non existent planning permissions and desperate excuser of failed organisational integrity?
      You couldn’t make it up? Or maybe they can and do? Or maybe its all just a ruse to place the cavorting jokester clown in the line of public fire and let embarrassed circus manager Cuadrilla off the pr hook?
      After all Angerus pr could not be lower in even their conspiratorial partners in grime view, so why not put their faces…..(got to be careful there) in the frame to get all the frack flak?
      What fun! Farcical fracktivist fantasy freaks flailing frantically falling further from failing feasibility, ohh, have to be careful with the ‘f’ word there! Temptation is almost too much!
      Have a great day, the whole fracking debacle is all coming apart at the seams folks! Come and see the show! It’s a doozy!
      Ahbaa ahbaas ahbaaa that’s all folks!

  6. Oh dear Kathryn. Not able to get the troops mobilised without the “f” word? Rather tired in relation to the Weald now. Try reading the Angus RNS.

    We were all young once. Even alternative energy sources started off as “kids playing together”.

    • Yes but this isn’t an “alternative energy source” is it. These companies are just bottom feeders scavenging tidbits from the gradually decaying corpse of a zombie industry that sooner or later will be put out its misery and finished off for good (and the greater good).

  7. Like it when the antis are competing with each other to try and claim there is no worthwhile oil. Surprised that their “expertise” has not made them that wealthy they are sunning themselves on a far away beach.

    However, if there is no worthwhile oil what are they bleating about? The exploration companies will pack up and go away once they discover that and all the ruination of the environment will not happen. Somewhat limits the posters, but life’s like that.

    • Your comment betrays an awful lot about your mind set priorities martin, the newly discovered, or rather rediscovered forms of practically free renewable energy production are open source, free to all once the last technological developments are solved, many all ready are in production. No vast corporations to feed, and no jealously guarded secrets hidden behind closed doors and corruption.

      There never was and will never be, an intention to make it a money making scheme for personal gain to rook the public just like all the rest of the energy monopolies.
      For the human race to move beyond this foul energy exploitation stranglehold farce, energy must be free for all. It always was free, it always will be free.
      That is the true hypocrisy of the oiligarchies. And it’s that they are scared of.
      That is what the selfless individuals and groups are working towards, and that is what the oligarchies are scared about people finding out.
      Your industries dreams of personal private wealth at others expense has to end before we can move on and make this planet a place worth living on for all, not just some insane jealous paranoid few. There is enough of everything for everyone, not the divide and conquer manipulation that has ransacked an entire planet for greed hatred and profit for the few.
      Until then we will oppose and keep on opposing the efforts to overturn and devastate this erstwhile democratic country for totalitarian control and subjugation, for profit and greed.
      Get used to it.

  8. If you are OPPOSED to Oil/Gas extraction simply do not use it ! But you will because you would be really be angry if they were not there to use! Just a bunch of hypocrites who rely on oil-gas-heating-electricity but protest because you think it is the right thing to do! In 1986 at Balcombe CONOCO drilled the same site for 21 day’s with not one HYPOCRITE PROTESTER in sight! In 2013 the anti fracking hypocrites complained about pollution of the air not being good for children,but thought it was okay to have a childrens play area between the Cuadrilla boundary and the edge of the B2036 main road with traffic passing within feet of the play area! Oh dear!

  9. Malc, the game has it’s rules.

    There is one section of the antis who argue there is no economic on shore gas or oil in UK, the other half argues that there will be industrialisation on a huge scale, then the first half starts to argue about the environmental “issues” forgetting they argued no commercial extraction would take place, then they argue it is all about the greedy capitalists but also argue that these are Ponzi schemes where all investors will lose fortunes. Then they argue that “fracking” is the devils work and link it to every development whether the planning application includes fracking or not.

    In other words, the arguments have run out, but the internet allows such to continue, via the “benefits” of the plastic keyboard and send button.

    • I know we’re on opposite sides of the fence on this, but I’m honestly (really!) interested in your reading of the situation here. This surely looks an awful lot like a replay of the subprime crisis doesn’t it? Yes securities are going to be ramped, industrialisation will go ahead to support that ramping and the associated environmental impacts will be suffered. Anyone smart will dump their holdings as early as possible, then reality will bite everyone else in the ass and the bubble will burst – either because there is no economically viable oil or else our climate change commitments will close it down. I don’t see how those are contradictory viewpoints? If these weren’t penny stocks with such massive exposure to short-term price variability then I would be shorting the shit out of this whole industry.

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