The UK’s biggest shale gas licence-holder declared a loss of more than £10m for 2017.
Annual accounts of Ineos Upstream, published online yesterday, also reported the company owed more than £125m to other companies in the Ineos group.
The accounts recorded that the company, also known as Ineos Shale, was funded internally by the Ineos group and had “no other comprehensive income”. Ineos Upstream met day-to-day working capital requirements through its intercompany loan. It had no contracted employees, paid no directors’ fees and paid no tax.
The company was regarded as a going concern because Ineos Industries Ltd had confirmed it intended to provide financial support for at least another year.
The accounts said the immediate parent company was Ineos Industries Holdings Ltd and the ultimate parent company was Ineos Ltd, a company incorporated in the Isle of Man. The directors regarded Jim Ratcliffe to be the ultimate controlling party, the accounts said, because he had a controlling interest in Ineos Ltd.
The lneos Upstream loss for the year was down on the £12.155m loss in 2016. The amount owed to group undertakings was lower than the figure of £525m+ reported for the year before.
A strategic report included in the accounts for the year to December 2017 said Ineos Upstream was focused on two sites operated by its joint venture partner, IGas.
One was the Springs Road site at Misson, described in the report as North Northamptonshire but actually north Nottinghamshire. The other was also in Nottinghamshire at Tinker Lane.
The report also said three Ineos Upstream planning applications for shale gas exploration had been rejected by local council planning committees.
Only one, at Woodsetts in south Yorkshire, was formerly determined. On the other two, at Harthill and Marsh Lane, Ineos appealed to the Planning Inspectorate against non-determination before formal decisions were taken. Councillors voted to oppose the applications at the subsequent public inquiries.
A 3D seismic survey, carried out by Ineos across 250km2 in the East Midlands in 2017, was 93% complete, the report added. Ineos Upstream is currently bringing a legal challenge against the National Trust to force access for seismic testing at Clumber Park in Nottinghamshire. The next hearing in this case is expected in July (details).
On future operations, the report said:
“The company aspires to quickly but deliberately explore onshore opportunities in the UK and rapidly develop producing assets where that exploration is successful.
“The company also continues to look for opportunities for acquisition of further licences in the UK, using experienced resources to evaluate the areas which show greatest potential for the extraction of hydrocarbons.”
The report confirmed that there were suspended or shut-in wells in licence areas in which Ineos had an interest. It said:
“At this stage no decision has been made to plug and abandon these wells and such a decision is not likely to be made in the short term.”
The report added:
“The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company where appropriate.”
Operating loss: £6.257m (2016: £8.804m)
Loss for the financial year: £10.659m (2016: 12.155m)
Fixed assets: £84.804m (2016: £48.658m)
Net liabilities: £38.362m (2016: £27.703m)
Owed to group undertakings: £125.569m (2016: £525.562m)
Joint operating arrangements in 24 licence areas