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