The company behind plans to frack at Kirby Misperton in North Yorkshire released its long-awaited 2016 accounts this morning, declaring a loss of £3.405m.
The accounts, due more than four months ago, showed Third energy UK Gas Ltd, owed £55.7m to parent and sister companies.
The delay in publishing the accounts was cited by the Business Secretary, Greg Clark, last week as one of the reasons there had been no final decision on whether fracking should be approved at Kirby Misperton. Mr Clark said he had asked for further checks on Third Energy’s financial resilience. DrillOrDrop report
The total loss for the year to the end of December 2016 was down by 12% on the 2015 figure, continuing a trend since 2014.
Turnover was £757,000, up 76% on 2015, but still below the 2014 figure of £897,000.
The total owed to companies in the group increased by 10% or £4.8m.
The amount owed to the parent company, the Cayman Islands-based Third Energy Holdings, was £48.16m. This was up from £44.475m in 2015 and £40.667m in 2014.
According to the accounts, this sum is repayable on demand. But the directors of Third Energy Holdings had confirmed it was “not their intention to seek repayment of this amount within the 12 months following the signing of these accounts”.
Third Energy UK Gas Ltd said in the accounts:
“The directors believe that, with the continued support of its parent company, the Company can continue as a going concern, and has the necessary funding available to ensure that it continues to trade on the going concern basis, for the reasonably foreseeable future.”
Third Energy UK Gas Ltd paid no tax in 2016.
Should Third Energy UK Gas Ltd start making a profit, it could pay £33.3m less in tax because of accumulated tax losses and accelerated capital allowances.
But for a second year, the accounts said the tax asset had not been recognised because:
“it is not certain that the Company will have sufficient taxable profits for the losses to be utilised in the foreseeable future”.
Pay and staffing
The accounts show that Third Energy UK Gas Ltd employed 16 people in 2016. There were no figures for payments to directors because they were made by Third Energy Holdings Ltd. Its accounts are not available.
Total loss: £3.405m (2015: £3.854m, 2014: £4.416m)
Turnover: £757,000 (2015: £428,000, 2014: £897,000)
Sales of gas to fellow subsidiary: £75,000 (2015: £399,000, 2014: £667,000)
Recharges to development partners: £682,000 (2015: 29,000, 2014: £230,000)
Intangible fixed assets: £24.094m (2015: £22.403m, £20.607m)
Tangible fixed assets (mainly gas development and production): £619,000 (2015: £896,000, 2014: £623,000)
Operating loss: £3.216m (2015: 3.676m, £4,245m)
Net current liabilities: £54,652,000 (£2015: £50,019,000, 2014: £44.270m)
Owed to Third Energy Holdings: £48.165m (2015: £44.475m, 2014: £40.667m)
Owed to fellow subsidiary companies: £7.544m (2015: £6.396m, 2014: £5.147m
Staff costs: £540,000 (2015: £624,000, 2014: £593,000)
Total staff: 16 (2 managerial and 14 operational/technical) (2015: 18, 2014: 18)
Admin expenses: £2.205m (2015: £2.252m, 2014: 2.138m)
Tax paid: £0 (2015: £0, 2014: 0)
According to the accounts, the immediate parent of Third Energy UK Ltd is Third Energy Onshore Ltd. The immediate parent company of Third Energy Onshore Ltd is Third Energy Holdings Ltd. The ultimate parent company of Third Energy Holdings Ltd is Barclays Bank PLC
Also published today are accounts for three other companies in the Third Energy group.
Third Energy Trading Ltd, which generates electricity from gas produced by group companies, made a loss in 2016 of £1,162,000 (2015: £694,000). Turnover was down £1,025,000 (2015: £1,534,000), as were cost of sales (the direct cost of business): £1,627,000 (2015: £1,650,000)
The accounts for Third Energy Onshore Ltd, described as an intermediate holding company and a subsidiary of Third Energy Holdings Ltd, showed no details of profit before taxation. It had net assets of £262,000, unchanged on 2015: £262,000. Lord Gadhia, a Conservative Party donor, was appointed a director of the company on 22 January 2018.
Third Energy Services Ltd, which provides management to fellow group companies, made a profit for 2016 of £319,000 (2015: £96,000). According to the accounts, it employs 11 staff and other companies in the Third Energy group owe it £9,828,000 (2015: £6,922,000).