Industry

No surprise that Third Energy is seeking funding from fracking industry, say campaigners

180310 KM Eddie Thornton 2

Third Energy’s fracking site on 10 March 2018. Photo: Eddie Thornton

Campaign groups opposed to Third Energy’s plans to frack at Kirby Misperton in North Yorkshire said this afternoon they weren’t surprised by reports that the company was seeking funds from rival operators.

Sky News reported today that the investment bank, Lazard, had recently approached a number of leading players in the shale gas industry to consider offers to invest in Third Energy. A takeover or merger was also being considered, Sky News said.

Third Energy is 97% owned by Barclays Bank but the bank confirmed last May that it was looking to sell.

Fracking plans at Kirby Misperton are currently on hold, probably until the autumn, while the government decides whether to issue the final consent.

The Business Secretary, Greg Clark, has ordered an assessment of Third Energy’s financial resilience. Last week, more equipment was moved off the Kirby Misperton site and it emerged that Third Energy wanted to avoid fracking in the summer.

In a statement this afternoon, Third Energy said:

“Third has all the necessary funding in place for its current operations, both onshore and offshore. As is normal in natural resources, including oil and gas, when moving into the development stage companies look at different options for funding known developments, future exploration and also further opportunities.”

Responding to the news, Russell Scott, of Frack Free Ryedale said:

“We aren’t surprised that Third Energy are trying desperately to find additional investors to prop up their failing fracking business.

“Third are now £56million in debt, have lost £3.4million in the latest accounting year and only have £112,000 cash in the bank. Suppliers have started pulling equipment off site at an incredible pace and the latest credit reports available suggest a large number of suppliers are being paid late. These are all telltale signs of a company in financial meltdown.

“Anybody who invests in this business will likely lose every penny and should expect to face huge public opposition.

“This latest news about Third Energy, who have been besieged with controversy lately proves once again that Greg Clark and the Department for Business, Energy and Industrial Strategy should continue to withhold consent for Fracking – they simply are not fit to operate.”

Steve Mason, of Frack Free United, said:

“The company is getting ready to sell. This is not surprising. The conclusion that most people would come to is that it would not be surprising if there was something in the background with INEOS. The signs have been there for some time”.

Questions over assessment

When equipment was first moved off the Kirby Misperton site last month, Third Energy said the financial resilience assessment may take “some time”.

But there’s a lack of information about what evidence and criteria the Department for Business, Energy and Industrial Strategy (BEIS) will use.

In response to a parliamentary question, the Energy Minister Claire Perry said the process would include Third Energy’s ability to fund decommissioning costs. She added:

“That process is still ongoing. The Department will respond further, as appropriate, in due course.”

In a Freedom of Information response, BEIS said:

“The work to assess Third Energy’s finances is being undertaken by the Infrastructure and Projects Authority. We expect this work to include reviewing indemnities and guarantees. Therefore the Department does not hold any of the information which you have requested.”

Third Energy also appears to have questions for BEIS.

DrillOrDrop understands the company reported to residents last week it had asked BEIS what information was needed but was told BEIS “didn’t know”.

16 replies »

  1. Perhaps Steve should speak to Russell. One seems to have some knowledge about business, the other only about propaganda.

    The business has been available for some time, and that has been in the public domain. Likely to be bought by another company wanting to frack? Well, it certainly wasn’t going to be of interest to many others. What are it’s assets? Oh yes.

    • Excellent research, thank you Ruth.
      It seems that Third Energy are desperate to show Gregg Clark they have some sort of financial future?

      However the question then arises, how this further embarrassment will be received by potential investors and how much they will have to sell their souls to achieve it, on both sides.

      Third Energy have not exactly covered themselves in glory so far and will this attempted phoenix resurrection be seen as redemption or just signs of further incompetence?

      Their only appreciable assets are the lease, the PEDL and the extent of drilling and the records.
      They have squandered everything else and their name is now Third mud in every other respect, or lack of it.

      It would be interesting to see how such pleas for finance are received and whether the other operators will simply asset strip what remains and humiliate Third Energy further with greedy asset stripping demands?

      In the dog eat dog world in which these would be predators operate, I suspect the result will be a picked clean financial carcass renamed to some less embarrassing label such as New Third World Energy?

      • Leaving only the fading smile of the Yorkshire Frack? Curiouser and Curiouser said Malice In Blunderland?

        [Typo corrected at poster’s request]

        • So, let’s get this right.
          A company 97% owned by a bank is looking for funding elsewhere?
          The bank wants to sell but the company is in massive debt?

          Are investors in said bank aware of their imminent loss/write off?
          Who seriously wants to buy such a failing asset; oh hang on, got that one; another one for his ‘collection’.

          I keep seeing a Trojan horse….why is that?

          • I think Sherwulfe this is one Trojan gift horse we don’t want to look in the mouth?
            Or indeed any other orifice?
            At least now we know which of the Trojan Horses orifices Third Energy’s accounts emerged from? If indeed emerged is the correct expression?

    • I guess if Third had been allowed to get on with their lawful business then they wouldn’t have needed the extra finance and the country could have started on the way to being less dependent on Putin and Middle Eastern dictators long before now.

      If the recent near miss on gas supplies (and another one possible next week) along with Putin’s probable murderous actions hasn’t begun to wake up central government about energy security then I don’t know what will.

      By the way I must take my hat off to the wind generation industry which really saved us by supplying more than 10% of our electricity in the recent cold spell. Unfortunately the wind doesn’t always blow and imported gas is sometimes scarce.

      • In the middle of a political media war with the big bad Russian boogie man a Russian spy and his daughter are exposed to a biological warfare nerve agent in Salisbury which is less than 10 miles from Porton Down one of the most secretive biological warfare research establishments in the country.
        And then this emerges in the middle of a tory media offensive and happens to emerge into the fracking arena as an anti Russian gas issue and cries of energy security just when confidence in fracking is plummeting and the operators are getting frustrated at every turn.
        Coincidence?
        Go figure.

      • “the country could have started on the way to being less dependent on Putin”

        OK SW – according to an official response from the government, Russia accounts for :

        a) about 1 per cent of our gas supply
        b) much less than 1 per cent of our gas supply
        c) a bit more than 1 per cent of our gas supply
        d) at least 2 per cent of our gas supply

        You can phone a friend if you have to …

        • So that’s your advice “keep your hat on” , well gas shortages are actually more likely to show as increased gas bills than in gas shortages because the Grid will reduce supply to industry first and prioritise the public, which is as it should be.

          By the way I think the newsbase article is about oil not gas from the North Sea. And of course with regards to wind, “we have higher wind speeds” but unfortunately on some days the wind speed is close to zero; what do we do then? That’s exactly why we need a back-up energy source ro work in partnership with renewables and provide a cheapish and reliable, secure energy.

        • You may well be right, but as I understand it Russian gas goes into the European system, and the U.K. mainly turns to it at times of shortage. Russia is also getting increasingly into the LNG trade which the Uk will rely on I more in the years ahead. I really wouldn’t get complacent about our energy supplies.

      • UK North Sea output poised to reach an eight-year high of 1.9 million boepd in 2018.

        https://newsbase.com/topstories/north-sea-tax-receipts-top-us15-billion

        Good news for those having reoccurring nightmares of Russians turning taps off.

        Germany generating more, installing more, and investing more in wind power than the UK in 2017

        A ridiculous situation as we have much higher annual wind speeds.

        https://windeurope.org/about-wind/statistics/european/wind-in-power-2017/

        Expensive dirty dangerous Chinese backed UK shale gas non existent for the eighth year running.

        Gas went scarce a while ago on a Thursday afternoon. By the morning of the following day things were back to normal.

        Not really a need to panic unless the North sea, Norway and our super modern LNG ports vanish into thin air.

        If you are still worried about the cold best leave your hat on.

  2. A bank, that, like most banks, has been instructed by it’s shareholders to focus upon core business and will do just that by selling off non core assets as and when appropriate. Will they want to continue investing, other than operationally, whilst that occurs? Suspect not. Now, isn’t that all so exciting?

    Beast (son of) from the East on the way back. Where will we get gas from this time? Much more exciting.

    • I have to applaud your Micawberish “something will turn up” attitude to Third Energy’s problem Martin, although I’m not really sure that’s what government testing of fracking companies’ financial resilience should be based on. Mind you it seems the government is none too sure about what it should be based on either. You couldn’t make it up. Maybe fracking means fracking? Perhaps there is red, white and blue fracking?

      It’s hard to say where any excess gas we need will come from, given that we have such a resilient and diversified set of potential sources Martin.

  3. What problem do TE have, refracktion? I recall numerous excitement fests on DOD concerning the financial “problems” of UK oil and gas companies, often with your good self indicating how you were so financially astute and could see all the problems building up. And what happens? The companies raise more money as required, or sell off assets to do the same (usually to someone already in the business that has been tarred with the financial doom and gloom brush by the antis a short time before.) OMG INEOS operate with some debt, shock, horror! Who doesn’t? Anyone have a mortgage? (I know, I am assuming some antis have an income.)
    I think it is fairly obvious who is making things up. But then, the antis have to try and justify sitting around in Yorkshire for so long and not achieving anything, with the delays to fracking being caused by extra hurdles being introduced by Government and nothing to do with their activities. Galling when the (improving) Gold Standards are the control and no impact from the antis. Hey ho.

    • Heavens! It must be so comforting in that “Walternate” fracking glass world of your imagination martin?

      But even Third Enemies Humpty Numpty had a great fall and all the Blue Queens Trojan Horses and all the Queens microwaved policemen couldn’t put Humpty Numpty together again?

      But do try not to wake Corbyn, the Red King? Or you will all vanish right away?

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