Industry

Third Energy sells onshore gas business

180205 KM Eddie Thornton

Third Energy’s site at Kirby Misperton, preparing for fracking in February 2018. Photo: Eddie Thornton

Third Energy Holdings Limited has announced it has sold its troubled onshore gas business, which includes well sites in North Yorkshire.

In a statement, the company said it had signed a sale and purchase agreement with York Energy (UK) Holdings Ltd, an affiliate of an American firm.

Under the deal, York Energy will acquire the entire share capital of Third Energy Onshore Limited.

The statement added:

“This sale includes the onshore gas exploration, appraisal and production company Third Energy UK Gas Limited, and Third Energy Trading Limited which owns the power generating station at East Knapton, North Yorkshire.”

Third Energy’s onshore business includes the gas production site at Kirby Misperton in Ryedale, where government permission to frack is still awaited.

The Department of Business, Energy and Industrial Strategy delayed a decision in January 2018 while a financial resilience check was carried out. Equipment was cleared off the site in April 2018 and earlier this month local people celebrated a year without fracking.

190410 KM protest Hazel Winter 1

Anniversary walk alongside Third Energy’s fracking site at Kirby Misperton, North Yorkshire, 10 April 2019. Photo: Hazel Winter

In February 2019, Third Energy agreed to new work commitments in the Ryedale area, including drilling five wells and fracking four by 2023.

The ultimate parent company of Third Energy, Barclays Bank, has said it has been seeking a buyer for the business for at least two years.

Accounts for Third Energy UK Gas Limited for the year to December 2017 revealed annual losses of £3.5m and liabilities of £63.9m. The accounts said:

“Third Energy Holdings Limited is not expected to provide the required funding to support the necessary activities to enable the group to progress to cash generation and continue as a going concern.”

The accounts added:

“the company will require significant capital expenditure to develop the conventional and unconventional resources of £14m, £5m of which is forecast in the next 12 months. In addition, the Company needs further cash injections even to operate without the additional capital expenditure.”

Alpha Energy

The new owner, York Energy (UK) Holdings Ltd, is described as an affiliate of Alpha Energy and was incorporated in 26 February 2019.

Tom ReedCompanies House lists the directors of York Energy (UK) Holdings Ltd as Tom Reed (right) and Jason Senior, both Americans.

The relevant legal entity, listed with Companies House, is based in the Cayman Islands.

Alpha Energy, according to its website, launched in the US in March 2018. It sought to generate maximum revenue from a company’s assets, the website said.

Tom Reed, who is also chief executive of Alpha Energy, said today:

“We are pleased to be working with the Third Energy team to develop the group’s energy and generation business, and look forward to constructive engagement with all stakeholders in Third Energy’s next stage of development.”

The deal is subject to agreement of conditions and the approval of regulators.

A Third Energy spokesperson told the Gazette and Herald newspaper in Ryedale that the sale would not affect jobs at the company’s Knapton generating station.

Ken Cronin, chief executive of UK Onshore Oil and Gas, the trade association for the onshore industry, said:

“We welcome today’s news and look forward to working with Alpha Energy to further develop North Yorkshire’s onshore gas industry, which has been in operation since 1995, creating new jobs and generating local electricity from local gas production.

“As we move to a more carbon conscious world, locally sourced gas has a huge role to play in meeting our energy demands in an environmentally responsible way, and we’re pleased that Alpha are on board to help us deliver it.”

17 replies »

  1. The yanks are coming, or rather they think they are, lend lease perhaps, at least five years late as usual.

    No doubt overpaid, overconfident and over here.

    Too late too, the war is over…..

    The Alpha and the Omega, via (Old) York.

    • As the U.K. moves from coal fired energy production, uses nuclear fuelled energy, plant sourced energy, biogas sourced energy solar and wind sourced energy we must not forget that a large portion of our energy is derived from hydrocarbons in the form of oil and gas,delivering what we have come to expect as our living standard.
      The production of local hydrocarbons helps reduce carbon footprint in the longer term by replacing large amounts of hydrocarbons that have travelled many miles with a carbon footprint.
      Until we can afford the luxury of 100% solar and wind sourced energy we must realistically accept that energy sourced from the burning of relatively clean natural gas is a stepping stone to a cleaner future.

  2. Who in their right mind would buy into what will shortly be stranded assets? Smell a rat here but i guess it takes the pressure off Barclays. Fracking will be dead and buried before it happens here.

    • The questions are: Why has Alpha bought the business under the restrictions of the seismicity Traffic Light System (TLS)? Do they want the conventional prospects only? Or do they believe the TSL limits on fracking will be relaxed? Hmmm….

  3. Perhaps they know something you do not, Jono.

    So, exactly what has been predicted for some time now happens. Not that exciting-unless you are one of those employed (oops-foreign word!) by Third Energy.

  4. So the selling of the idea that that oil and gas will make the UK prosper is a fallacy as money will be disappearing across the pond and very few jobs for locals. We also know how the US views gold standards and environmental protection

    • You mean like Exxon who announced £800m investment today into Fawley Refinery, supporting up to 1000 construction jobs at its peak, Paula?

    • Paula C

      In this case it seems the money has come from America to the UK, and losses will cause further money to move this way. In the meantime the locals working there at present will continue to be employed, paid and taxed. So no change there.

      In addition any other taxes ( business rates … whatever ) will continue to be paid in the UK.

      Hence better for the UK than just importing the stuff where the taxes paid to employees or contractors are not seen here in the UK. Although this small gas play is not likely, on its own, to make the UK prosper.

      Re regulation, do we know the companies views on UK regulation? They can ask the various American companies working in the North Sea, or maybe the Chinese companies, French, Dutch, Saudi etc etc, for a heads up.

  5. Now would be exactly the time when you would not invest in UK shale. Nearly 10 years on since the first planning applications were passed unopposed and not a whiff of commercial gas in site. Climate change at a critical point and the Government falling back with it’s support for the industry. Time and time again community groups and councils stopping the industry in it’s tracks.

    Barclays wouldn’t give up a viable business proposal easily.

    Sounds like a number fudging and hype promoting attempt to bolster a dying industry.

  6. Yes, they would John. Like all major banks after the crash they have been under pressure to get rid of non core business. Unlike some other major banks they did not get a bail out so have been somewhat slower to move. Perhaps they were just waiting for oil and gas prices to firm?

  7. Why do UKOG and virtually every other pro-fracking person continually say that fracking is a cleaner energy than coal? It is not. Fracked gas is made up of 97% methane, which over a twenty year time frame is 85 times worse than co2. Given that we only have around ten years to radically reduce fossil fuel use in order to keep temperatures below 1.5C, it is imperative that the first greenhouse gas to be eliminated in order to reduce temperatures must be methane and since fracking produces methane in huge quantity (as evidenced from satellite data above the fracking shale plays of the US) fracking should and must be the first fossil fuel sacrificed and left in the ground, even ahead of coal? It has already been proved that if you reduce methane emissions on a large enough scale, temperature begins to fall and stabilise enough to be controlled. Also now proven is that even small reductions of methane from the atmosphere can make a huge difference to global temperatures. Every molecule of methane taken out of the atmosphere greatly helps to reduce global temperatures. This is because methane has a higher GWP (Global Warming Potential ) than co2 and since co2 is created by burning coal, it would be better in the long term to continue to burn coal than to frack? So fracking is in now way a bridge fuel and the time for ”transition” is now over, as Elvis said quite nicely ”Its Now Or Never” as far as renewables are concerned, given we only have about a decade to get renewables onstream before the excrement hits the ventilator. I would like to end by asking some questions: The Committee on Climate Change will next week report on what radical steps must be taken by the UK Government in order for the UK to stay within its legally binding commitments through the Climate Change Act and its commitments to the Paris agreement Here are some questions that perhaps need answers. Will the Government implement all of the CCC’s recommendations in full? Will the Government use the excuse of cost as a reason for NOT doing what the CCC recommends (remember the very pertinent words of Greta Thunberg only this week, that Governments always look first at how much it costs, when they should be looking at reducing the temperature rise first, in other words, forget the cost, bring the temperature down first or you will not have a planet to spend your saved money on!) Finally will the Government ban fracking in England if the CCC says that fracking and its release of methane is incompatible with the Paris agreement and by default the Climate Change act?, I have already seen one report (not by the CCC) that says exactly that. So will Claire Perry make a statement that fracking in England cannot go ahead? Or will she do as she and her Government have done since taking office and ignore it and other evidence of harms from fracking? Do Cuadrilla know something we do not and that is why they are effectively packing up their equipment at PNR? Time will tell, whatever happens fracking in England is now dead and will soon be buried. The times they are a changing.

  8. Tell you what, e, you forget the costs and fund it yourself. The rest of us get a bit irate when we find out that eco lobbying is adding £500m per YEAR to our combined energy bills for one incorrect calculation, on just one scheme. Social Care reform is still awaiting funding and I see that as the first priority whilst we continue with the sort of progress we have achieved in the UK regarding renewable energy.

    Perhaps if industry could increase its tax contribution above the current £200 billion more could be done for both. Norway seems to have found that out. Wonder what they are doing different? Oh-utilising their natural resources-oil and gas, largely.

    The Government have no money. It is tax payers money and I, for one, want my small bit spent wisely. You will find the Government have received loads of reports with recommendations and they then act on some and park some. In retrospect it can often be found they were correct in their choices, sometimes not.

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