Bothamsall oil site © Copyright Richard Croft and licensed for reuse under creativecommons.org/licenses/by-sa/2.0

IGas announced today it was withdrawing investment from 10 oil and gas licences in the East Midlands, southern England and north east Scotland.

According to 2017 data, the licences include several of the company’s lowest-producing oil fields.

IGas said it had signed a sale and purchase agreement with Onshore Petroleum Limited, a company formed in 2017 with a single director.

The deal is expected to be completed in the second half of 2018, IGas said.

In a statement in advance of today’s annual general meeting, IGas said it was divesting 100% of its interest from licences PL220, ML3, ML6, ML7, PEDL70 and PL205. Four of these licences are in the Nottinghamshire and Leicestershire, one in Hampshire and one in West Sussex.

IGas said it was also divesting 50% from PEDL158, an onshore licence on the Caithness coast in north east Scotland, and the adjoining offshore licence, P1270.  The remaining licences, PEDL235 and PEDL257, both in Surrey, will see IGas divest by 25%.

The company said:

“As we continue to identify and evaluate the future potential of our existing producing assets, we have agreed to divest certain non-core assets representing c.100 boepd [barrels of oil equivalent per day] to Onshore Petroleum Limited (OPL).

“A Sale and Purchase Agreement has been signed for a consideration of £3.14 million, which will be satisfied by the provision of oil field services to IGas by OPL.”

Onshore Petroleum Limited is based in Newark, Nottinghamshire. The single director is John Palmer, described as a drilling supervisor. He is also a director of five other active companies, including P W Well Services, all based in Newark.

The agreement has to be confirmed by the Oil & Gas Authority. Environmental permits for well sites in the licence areas will have to be transferred to OPL and need agreement from the Environment Agency.

IGas is the second biggest onshore oil producer in the UK. In 2017, its fields produced 132,910 m3 of oil, 14% of the UK total. It was, however, a long way behind the largest producer, Perenco Oil & Gas, which produced 817,534m3 during 2017, or 84% of the total.

• The statement also said IGas expected to spud its first shale gas well in Nottinghamshire and submit an application for Ince Marshes in Cheshire, both in mid-2018.

More details on licences

East Midlands

PL220

Licence PL220 in Nottinghamshire and Leicestershire. Map: UKOGL

• 100% held by IGas. Divesting 100%
• Licence issued August 1982. Due to end 2026
• Licence comprises two blocks: one NE of Loughborough and one NW of Melton Mowbray. The western block includes the Rempstone oil field. In 2017, produced 505m3 – under 1% of IGas total oil production. The eastern block  overlaps part of the Long Clawson oilfield

ML3

Licence ML3 in Nottinghamshire. Map: UKOGL

• 100% held by IGas. Divesting 100%
• Licence issued August 1982. Due to end 2026
• Licence is north of Newark and east of Clumber Park, where Ineos is challenging the National Trust over the right of access for seismic testing. It includes the Egmanton field, which produced 427m3 in 2017, less than 1% of the IGas total oil production.

ML6

Licence ML6 in Nottinghamshire. Map: UKOGL

• 100% held by IGas. Divesting 100%
• Licence issued 1964. Due to end 2040
• Licence adjoins Clumber Park (see above). There are more than 60 well sites in the licence area, including the Bothamsall field, which produced 1,821m3 in 2017, 1.4% of the IGas total oil production.

ML7

Licence ML7 in Nottinghamshire. Map: UKOGL

• 100% held by IGas. Divesting 100%
• Licence issued 1964. Due to end 2040
• Licence is east of Retford and north east of Clumber Park. It includes the South Leverton field, the lowest producing IGas field. It produced a total of 20m3 I 2017, less than 0.0% of the IGas total oil production.

Southern England

PEDL70

Licence PEDL70 in Hampshire. Map: UKOGL

• 53.6% held by IGas. Divesting 100%
• Licence granted 2000. Due to end 2031
• Licence is east of Winchester. It includes the Avington well, which produced 2,028m3 or 1.5% of IGas total oil production in 2017. Other interests in the licence are Aurora (8.33%), Corfe Energy (5%), Egdon Resources (28%) and UKOG (5%)

PL205

Licence PL205 in West Sussex. Map: UKOGL

• 100% held by IGas. Divesting 100%
• Licence started 1982. Due to end 2026
• Licence is south of Pulborough, largely in the South Downs National Park. It includes the Storrington oil field, which produced 1,963m3 in 2017, 1.5% of the IGas total. Planning permission was granted in 2017 for another 15 years of oil production.

PEDL257

Licence PEDL257 in Surrey. Map: UKOGL

• 100% held by IGas. Divesting 25%
• Licence issued under the 14^th round in 2016. Due to end 2046
• Licence is north of East Grinstead and includes one non-producing well site at Lingfield. It is next to licences, PEDL137 and 246 operated by Horse Hill Developments Ltd, the company behind the so-called Gatwick Gusher wellsite near Horley.

PEDL235

Licence PEDL235 mostly in Surrey. Map: UKOGL

• 100% held by IGas. Divesting 25%
• Licence issued in 2008, with an extended initial term due to expire in June 2018. Licence due to end 2039.
• Licence is east of Haslemere in Surrey and north of the adjoining PEDL234 which includes the UKOG Broadford Bridge site. PEDL235 includes the Godley Bridge-1 well, a non-producing Portland sandstone gas discovery.

Scotland

PEDL158

Licence PEDL158 in Caithness. Map: UKOGL

Licence P1270 in Caithness. Map: UKOGL

• 100% held by IGas. Divesting 50%
• Licence granted 2004, originally to Reach Exploration (North Sea) Ltd. Due to end 2035
• Licence is on the Caithness coast, south of Wick in north east Scotland.

P1270

• 100% held by IGas. Divesting 50%
• Licence granted 2005. Due to end 2031.
• Offshore licence adjoining PEDL158 (see above)

Update: IGas failed to complete the deal to divest the licence areas