Third Energy has committed to drill three wells and frack four in the Ryedale area of North Yorkshire in the next four years.
Under the revised terms of its exploration licences, the company is required to frack its gas well near the village of Kirby Misperton by the end of 2019. Within the next 18 months, it must also drill a 1,000m lateral well and carry out another frack.
After that, Third Energy has committed to drill and frack a 3,000m well by 30 September 2021 and drill and frack another well into the Bowland formation by 31 December 2022.
A further new well must be drilled in the area by the end of 2023 and one more by 2024, taking the total new wells to six.
Opponents of Third Energy’s activities in Ryedale said today they were surprised to see the work commitments, given the company’s financial position.
In November 2017, Third Energy told residents it was ready to frack the KM8 well at Kirby Misperton.
But two months later, the energy secretary delayed granting hydraulic fracturing consent until there had been a review of the company’s financial resilience.
Since then, the fracking equipment has been cleared from Kirby Misperton and no outcome of the review has been published. The company’s most recent accounts revealed liabilities of £63.9m and an annual loss of £3.5m.
The new work commitments (extract above) are the first formal indication that Third Energy expects to be back to frack at Kirby Misperton.
News of the commitments emerged in an updated document published by the Oil & Gas Authority (OGA), the government-owned company which regulates onshore licensing. The document was referred to yesterday in a parliamentary answer by the energy minister, Claire Perry.
The Third Energy commitments were added to the latest version of the document, updated in December 2018. They cover a collection of six licences (AL006, DL005, PL079, PL080, PL081 and PEDL177) east of the Howardian Hills, between Malton and Pickering
The licences include Third Energy’s existing gas fields, at Kirby Misperton, Pickering, Malton and Marishes, which supply the company’s Knapton power station.
The commitments must be met if Third Energy is to retain its licences – although the company and the OGA can agree to changes, including extended deadlines and a reduced work programme.
To drill, frack and test, the company must also secure planning permission, environmental permits and hydraulic fracturing consent.
It has planning permission to frack the KM8 well at Kirby Misperton – though a condition of that consent, granted on 27 May 2016, requires the development to be implemented within three years of the decision.
At other sites in Ryedale, Third Energy has outstanding applications to North Yorkshire County Council for 17-year extensions of planning permission. The Knapton Generating Station and piped connection to the grid is part of these application and is likely to be decided by the Department of Business, Energy and Industrial Strategy.
Paul Andrews, the Mayor of Malton and a Ryedale District councillor, said:
“It is clear from the terms of the licence that the intention is that, once fracking begins, it will be a continuous process.
“In other words, this is not a case of a couple of drill pads drilling a new hole once every twenty years: it’s a case of one bore after another in quick succession all over the Vale of Pickering, repeated over and over again.
“This is important because the greatest difficulty I have is in persuading people that the fracking process goes far beyond the boring of the few conventional wells we have at the moment, which – let’s be honest – are not a problem for residents.
“The terms of the licence prove that the government knows exactly what the consequences of their policy will achieve – the complete industrialisation and devastation of our beautiful county.”
Third Energy’s Ryedale commitments timeline
31 December 2019
- Complete KM8 well (including hydraulic fracturing) and flow test
30 September 2020
- Drill a 1000m lateral well, complete (including hydraulic fracturing) and conduct a flow test
30 September 2021
- Drill a 3000m well to the Hodder formation, complete (including hydraulic fracturing) and conduct a flow test
31 December 2022
- Drill another well into the Bowland formation, complete (including hydraulic fracturing) and conduct a flow test
- Acquire a new 3D seismic survey over the eastern part of PL081, covering the Fordon prospect and deeper Bowland formation targets
31 December 2023
- Drill a well in eastern part of PL081
- Drill a Hodder formation well in PL079
- Submit a field development plan or addendum FDP for the Greater Kirby Misperton Structure
31 December 2024
- Drill an off structure well into the Bowland formation from a new wellsite on PL081
In another North Yorkshire licence area, PL077, the new work commitments require Third Energy to submit a Field Development Plan for the Ebberston South gas field by 30 June 2019 and begin production by 30 June 2021.
Another change concerns PEDL145 in Warrington held by Ineos. The updated document extends the time in which Ineos must acquire new seismic data, from June 2018 to December 2020. The company also has more time to submit a planning application for drilling (from 31 December 2019 to 31 December 2022) and to test the well (from 30 June 2021 to 30 June 2024).
In PEDL188 in Cheshire, IGas has a new commitment to acquire 3D seismic data by 30 June 2020 and drill a well by 30 June 2021.
Exploration, appraisal or production?
Some of the licences in the updated document are now in their third (or production) phases. But the work commitments, such as seismic surveying, drilling and fracking, would normally be done in the exploration or appraisal phases. Opponents of the industry have raised questions about whether the licences should have been moved into the production phases.