Cuadrilla and Third Energy have entered an agreement on gas appraisal plans in Ryedale, North Yorkshire.
The deal covers an area from near the coast at Filey inland to about five miles east of Malton, Third Energy told DrillOrDrop today
The news was announced in a short statement early this morning to the Australian stock exchange by Cuadrilla’s owner, the mining group AJ Lucas.
The statement said the agreement would appraise a gas prospect spanning licences held by both companies.
“Third Energy will operate and entirely fund an appraisal well to assess the potential commerciality of a natural gas prospect in the relatively shallow Sherwood sandstone.”
It added the gas play was “a conventional one and no hydraulic fracturing will be required”.
Both companies have previously made unsuccessful attempts to frack for gas.
Cuadrilla’s shale gas operations at Preston New Road in Lancashire caused earthquakes and led to a moratorium on fracking in England, which is still in force.
Third Energy, under its previous owners, Barclays, got planning permission to frack an existing well at Kirby Misperton in Ryedale but failed to get final consent from the government.
Today’s agreement, which must be confirmed by regulators, would split any future gas production 75% to Third Energy and 25% to Cuadrilla.
Third Energy said the agreement covered its PL081 licence and Cuadrilla’s PEDL347.
Asked where the appraisal well would be, Third Energy’s managing director, Russell Hoare, told us:
“No location has been identified yet.”
On the timetable for the project, he added:
“No timescales yet, only an agreement on split of future production.”
He said any work would need planning permission. The deal covered just the commercial split of any gas:
“Because the gas-bearing formation spans both licences, any development of that formation would need to be done with an understanding of the commercial split of the production and this agreement defines that in advance. It also gives control of any development to Third Energy as Operator.
“The formation is relatively shallow and would not be suitable for hydraulic fracturing. Cuadrilla have retained their rights to the deeper shale formations on their license.
Third Energy has previously announced proposals for geothermal energy using existing wellsites in the Ryedale area. Russell Hoare said:
“Our geothermal strategy remains in place for many of our current wells. We are looking at a range of energy projects across our assets including geothermal and solar but gas is deemed by the UK government to be an essential part of their Net Zero 2050 strategy. It therefore makes sense to consider domestic gas production over and above the increasing need to import gas.”
David Davis, of Frack Free Ryedale, said:
”Frack Free Ryedale are disappointed that Third Energy are to recommence fossil fuel exploration and development given their many statements relating to ‘green’ solutions throughout the last 12 months. The truth is we are dealing with a company and an industry that is driven by speculation. Third Energy clearly will continue with their normal business of extracting fossil fuels. Third Energy are showing the community their true colours – and those do not include green!”
Hazel Winter, a member of the Kirby Misperton community liaison group, said:
“Third Energy have held this licence since the 1960s so it does seem strange they have not investigated the Sherwood Sandstone Group as a potential source of gas in this PEDL area before now.
“The British Geological Survey have identified deep saline aquifers, including the Sherwood Sandstone Group as one of the best prospects for a heat resource for geothermal energy. They are also currently conducting research into sandstone formations as possible reservoirs for hydrogen storage.
“Given Third Energy’s recent pledge ‘to be at the forefront of North Yorkshire’s transition from fossil fuels’ I am disappointed that they appear to be reverting back to a quest to find gas.”
Steve Mason, of the campaign umbrella group Frack Free United, said:
“This seems to be a last throw of the dice for onshore extraction. Conventional or fracking onshore in the UK is a bit like ‘flogging a dead horse’. It is pointless and in very bad taste, especially in the current context of policy, social licence, the climate emergency and in the year of COP26.
“Business as usual is not an option, especially as the ‘we need indigenous gas to transition’ argument has failed when they argued for fracking, it’ll fail again.
“I urge Third Energy to keep its recent greener pledges to the community on track and forget forever a quest for fossil fool’s gold.”
- Cuadrilla holds eight shale gas licences in Yorkshire, including PEDL347. Third Energy has been ordered by the Oil & Gas Authority to plug and abandon its existing wells in Ryedale. Today’s agreement does not affect these wells, the company said today.