Industry

“Largely non-operational” Cuadrilla Resources declares £38m annual loss

The shale gas company, Cuadrilla Resources, has described itself as “largely non-operational” following the moratorium on fracking in England.

The company, now owned by the Australian mining group, AJ Lucas, recorded a loss of £38.5m in the year to December 2019.

The annual accounts said material uncertainties “may cast significant doubt upon the Company’s ability to continue as a going concern”.

Cuadrilla is the only company known to have carried out high volume hydraulic fracturing in the UK.

Fracking operations at its Preston New Road site near Blackpool were suspended on 26 August 2019 after an induced earthquake measured 2.9ML – the largest so far recorded in the UK. The moratorium was imposed on 2 November 2019 and is still in force.

Cuadrilla said it had been working, along with other UK shale gas companies, to address the concerns which led to the moratorium. But it said:

“The very low regulatory thresholds on induces [sic] seismicity applied to hydraulic fracturing in the UK make this a particular challenge. As such, it is not possible to say when exactly a solution that meets current UK regulatory expectations may be arrived at.”

The company said the potential recovery of shale gas from the Preston New Road wells “remains to be determined” because it had not been able to measure a sustainable flow rate.

Loans increase annual loss

The £38.5m loss in 2019, compared with a loss of £99,000 in 2018.

Cuadrilla said most of the loss came from “an exceptional” impairment charge on loans to subsidiaries – largely money advanced to Cuadrilla Well Services Limited.

The company said AJ Lucas had committed to provide financial support for the next 12 months to allow it to trade and meet its liabilities.

Chief executive, Francis Egan said Cuadrilla had “very significantly reduced its operating costs” and was “currently largely non-operational”.

But he added:

“[the company] has retained its extensive technical data-base, corporate knowledge and access to technical and operational capability. It remains therefore well positioned to respond to what is considered a likely future re-evaluation of the value of UK indigenous natural gas.”

He said there may be a “re-think on the value and benefits of domestic UK exploration and production” with rising gas production and “increasing recognition of the environmental benefit of domestic gas production compared to long distance imports”.

Cuadrilla Resources Limited is a subsidiary of Cuadrilla Resources Holdings Limited. The accounting period for Cuadrilla Resources Holdings Limited has been extended from 31 December 2019 to 30 June 2020. The controlling party for both companies is AJ Lucas Group Limited.

Key figures for Cuadrilla Resources Limited

Revenue (management fees for operational and admin services to subsidiaries): £3,115,000; 2018: £1,571,000 –

Operating expenses: Not listed for 2019; 2018: £124,000

Admin expenses: £4,316,000; 2018: £1,655,000

Impairment of intercompany receivables: £37,601,000; 2018: £29,000

Operating loss: £38,802,000; 2018: £237,000

Loss for the year: £38,565,000; 2018: £99,000

Non-current assets: £148,000; 2018: £81,000

Current assets: £65,9111,000; 2018: £92,445,000

Total assets: £66,059,000; 2019: £92,445,000

Total liabilities: £111,103,000; 2018: £99,007,000

Net liabilities: £45,044,000; 2018: £6,481,000

Staff numbers: 24; 2018: 26

Payroll: £3,180,000; 2018: £3,281,000

Aggregate pay for highest paid director: £601,000; 2018: £480,000

Total cash outflow on qualifying leases: £70,000

6 replies »

  1. It may save a lot of everybody’s time and company embarrassment if the investors just sent their hard earned cash straight to the Directors.

  2. Agree, what with the HS2 vanity project the taxpayer could do with it right now. And northern counties’ environments would be better off without it as well as without any type of fossil fuel extraction.

  3. Sorry to spoil your fun, but suspect this is NOT tax payer money! It would only become tax payer money if the operation made enough profit in the UK to defer it against tax. Hardly likely. Financial support coming from AJLucas may have an impact upon largely Australian investors, and if they believe that to be incorrect, they can vote accordingly.

    If I was anticipating any activity from Cuadrilla, I would look to other countries.

  4. Friends, Lets hope they Caudrilla go into administration or better still, Bust Please pass along to all contacts Peace to you all Rob Redford GMB Union Lincoln

    ________________________________

  5. There exemplifies the Christmas spirit! I thought unions were supposed to support the workers? Good job the mines have closed, otherwise the unions would be doing a Maggie.

    Seems there is no end to the hypocrisy and attempts to divert.

    How much tax payer money has been wasted policing PNR? How much at the Courts? And, not to mention, then found guilty of defrauding the tax payer. I can see why the antis would want to try and look for salvation by passing their sins to others, however, a little too obvious.

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