Industry

80 fracking wells could supply 3 million homes in a year – IGas

IGas has estimated it could produce fracked gas for three million homes within 12-18 months if the fracking moratorium was lifted.

The company, in its annual accounts, based this on five well pads with a total of 80 wells.

But it said this would need “the right government support” to rapidly accelerate the development of shale gas.

IGas site at Misson Springs, Nottinghamshire, 4 February 2019. Photo: Eric Walton

IGas has welcomed the government’s review of shale gas science, announced yesterday.

Chief executive, Stephen Bowler, said today:

“We welcome … the opportunity to demonstrate how shale gas can provide safe, secure and affordable energy for the UK.  We believe that expediting shale gas development will help alleviate the recent supply issues and high prices, alongside reducing emissions through to the replacement of imported gas.”

IGas said it an estimated 93 trillion cubic feet of shale gas accessible from its almost 300,000 acres of licences.

But the company currently has no shale gas sites with planning permission. The Springs Road site at Mission, in Nottinghamshire, was refused an extension last year. Its existing vertical well is due to be sealed this year.

Unlike ministers, IGas predicted today that UK shale gas resources could reduce gas prices.

It also said today that UK shale gas could reduce the country’s carbon footprint by replacing imports, improve the balance of payments and country’s tax revenues, and create jobs.

The accounts said that shale cores from the company’s Springs Road, Misson site in Nottinghamshire, predicted an estimated 630 billion cubic feet of gas per square mile:

“If applied to all our East Midland’s acreage that would imply over 250 TCF of gas in place.  Even at a conservative 10% recovery factor, 27 TCF of gas would satisfy the UK’s requirements for nine years, from our acreage alone.

“If the UK Government were to lift the moratorium and allow activity to proceed through permitted development we have the potential to deliver 5 production well pads, with each pad having up to 16 wells, which would supply 3 million homes with initial production within 12-18 months. Total production is estimated at c.750 BCF from these 5 production pads.”

Key figures for year to end of December 2021

Today’s accounts showed a rise in revenue and operating cash flow and a reduced loss before tax, compared with the year to December 2020.

Revenue: £37.9m (2020 £21.6m)

Adjusted Earnings before tax, depreciation and amortization: £5.9m (2020: 4m)

Loss after tax: £6m (2020 £42.1m)

Operating cash flow: £7.4m (2020 £3.3m)

Cash and cash equivalents: £3.3m (2020 £2.4m)

Investment in assets: £4.8m (2020 £8.4m)

Average net production: 1,962 barrels of oil equivalent per day

Underlying operating costs: $37/barrel of oil equivalent

Anticipated net production in 2022: 2,000 boepd

Anticipated operating costs in 2022: $38.boe

43 replies »

  1. All those wells for only 12 to 18 months and that is if it will even work. A completely unproven industry in the U.K. And with lots of experts, including some that previously supported fracking, stating that it will not work in the U.K.

    This industry has always over sold fracking, every step of the way. And now they hope to dangle unproven carrots in front of the government’s eyes. A good dose of reality would be useful.

    I am sure many remember how the industry, media, Parliament and the pro fracking lauded Chris Faulkner aka the Frack Master despite the fact he had never fracked anything and he went on to swindle millions out of investors based on drilling and recovery projections. Talk about the Emperor’s new clothes.

    The reality is iGas cannot possibly know whether it will even get 10% of the gas, this is nothing more than guesswork and we have been here before.

    Cuadrilla stated back in 2015 that it would take circa 40 wells and five years just to see if fracking was viable in the U.K. And importantly they also stated, even back then, that fracking would not lower gas prices. But hey, now all iGas has to do is drill 80 wells and bingo!

    So how will iGas lower gas prices, given that piped North Sea has not. Are they going to register as a not for profit charity? Or are they admitting the industry is ripping us off? They can’t have it all ways

    https://www.cbsnews.com/dfw/news/frack-master-christopher-faulkner-dallas-sentenced-prison-bilking-oil-gas-investors-millions/

    https://www.theguardian.com/environment/2018/aug/27/fracking-frack-master-chris-faulkner-parliament-texas-jail

    https://www.theguardian.com/environment/2014/jan/31/uk-shale-gas-fracking-cuadrilla

    • What utter nonsense you have little or no knowledge of gas extraction. We wouldn’t have had North Sea gas and oil if the wokes of today had been about

  2. Ahh, overselling!?

    Well, it will be interesting to see the costs of the new nuclear to back up the lack of wind and sun, if it is announced tomorrow.

    I seem to remember some pretty heavy overselling of renewables, just about every year for the last 10 years, and more. How are those house owners doing who leased their roofs for solar panels and didn’t notice in the small print that they would not be free to sell their houses?

    Of course, if it is overselling by IGAS then there is no issue. The gas would not be produced economically and the development would stop. You can’t have it both ways.

    • FRACKING is an energy intensive toxic industry , that is dangerous to animal and human health , is highly damaging to the climate and the environment . It leaves an ongoing financial and toxic legacy for future generations . Living near a Fracking site also devalues your property .

      Fracking in the UK will not lower your energy bill .

      Apart from the Igas CEO and a few desperate share holders , who would want such an industry ??????

      • Well, Jack, word for word the same quote that you have been using for several years!

        Must be painted on your yurt.

        How about a variation? Living near a wind farm devalues your property. Living near electricity pylons devalues your property and is associated with a cancer risk. Living without adequate taxation income to fund the NHS is dangerous to human health, so this week watch your take home pay reduce, whilst corporate taxation is transferred overseas.

        There are plenty in USA who would not want such a UK industry, as they are quite happy and rewarded well to do the job, over there. Just a shame about the income in the UK to protect human health.

        And, yes, fracking in UK and elsewhere, will lower energy bills as price is dictated by the balance between supply and demand. Raise the supply and price will drop. That is exactly why pressure is being applied worldwide to achieve just that.

        There are, of course, those hell bent on stopping that happening.

        • THANK YOU MARTIN , for once again giving Jack the opportunity to present the facts .

          PLEASE , let JACK know which parts of what I have said in my above post , you dispute.

          I will be delighted to back up anything I say with REAL facts , not just an OPINION.

          • Nope, you gave your opinion, Jack, without any facts!

            I have seen some examples of short term memory, but that example must be at the top of the tree.

            Please let me know what other developments may adjust the value of a property. I think that will keep you quite busy.

            A strange direction to go though, Jack. Individual profit before public “good”. Careful, you will fall out with those who frown upon such things.

            • MARTIN ,

              I’m sorry if your finding what I’ve said very difficult to understand..

              BELOW is an extract of what I said ABOVE , if you once again are having difficulty understanding some of the words , ask Jack for help .

              ” PLEASE , let JACK know which parts of what I have said in my above post , you dispute.

              I will be delighted to back up anything I say with REAL facts , not just an OPINION. ”

              MARTIN do YOU understand ?????

          • Jacktheweelad:
            BP and Shell are taxed on their UK interest, don’t be fooled by the profit! The business your involved in make profit?

            There is a lot of excitement this morning about Shell’s tax figures. And once again Ed Miliband is getting it woefully wrong.

            Tax refunds related to the decommissioning of old oil platforms meant that rather than paying tax on its upstream operations, Shell attracted a rebate of around £92.6million on previously overpaid taxes.

            Mr Miliband has used this as evidence for a windfall tax, claiming that the company is “receiving millions from the taxpayer”.

            Simply not true. I think we’re entitled to expect better from a former leader of the opposition. Now is not a time for glib soundbites, it’s a time for pragmatism and reasoned debate.

            Owing to the fact that decommissioning tax reliefs can only be claimed when decommissioning spends are incurred, companies will, over an asset’s productive life, effectively have ‘overpaid taxes’ and so will be in a ‘tax credit’ situation at cessation of production.

            The Shell story is a great example. Around £57million of the rebate quoted today relates to decommissioning old platforms at the Brent field. This is a field that has generated an estimated £20billion of tax revenue in today’s money.

            Filing for these tax reliefs in recent years when income streams have been low due to the pandemic has attracted tax rebates against previous taxes on profits, paid in line with standard business taxation practises. While it can give the appearance that the government is paying towards decommissioning, but it is actually just a ‘rebalancing’ of the tax accounts. It is not cost, it is cashflow.

            There is undoubtedly additional revenues flowing into big oil as a consequence of higher prices, but a windfall tax is a blunt instrument which will achieve little. Instead, we should be focussing on investment in our energy transition.

            Shell is investing £25billiion in the UK energy system over the next decade, bp is investing £2 for every £1 it makes in the UK and Neptune Energy is looking to go beyond net zero by 2030 – let’s focus our efforts on holding companies to these promises. Our energy security (and energy bills) will be far better off for it.

            Frack On!!

          • Well, Jack, I think you have received an informed answer from E-G. You obviously preferred the uninformed one from the Mirror!

            If you want to simply transfer political nonsense dressed up as reality it is your choice. Miliband has been trying it for years and fooling few, even with his Ed Stone. Looks as if he has won one with yourself, but even the SNP tore his energy taxation plans to shreds recently-and they have the Greens to keep happy.

      • OMG, Lord Browne has been requoted!

        Far better position than me? Maybe, but maybe not. Looking at his record I would suggest those he did deals with, who came out as being in a FAR better position, are the ones to consider, not the one who got done!

        But, keeping individuals out of it, this month I will receive £150 to help pay my gas bill. Where will that come from Jack? Ideally, it will come from corporations who pay tax to the Government and they plonk some out to me as my £150. Are those companies over the horizon paying tax over the horizon going to contribute to my £150? Nope. Not even that power house, Chesapeake Energy!

        Sorry, Jack, someone pays for the £150. Lord Browne and the Guardian may not understand that, but many individuals do, as they pick up the tab if the corporations do not. Even on borrowing, which is no longer cheap.

        • HAHA MARTIN ,

          Highly expensive UK fracking will NOT bring down UK energy prices .

          What it will bring is a heavy financial burden to the UK ……. Increased poor health to it’s citizens due to the toxic nature of fracking will bring a heavy burden on the NHS . Also what about the environmental costs and what about the toxic , costly legacy for future generations ,??????

          Finally, again I ask , what about the de-valuing of house prices in the areas of fracking ?????

          What are the total financial costs MARTIN ??????

          MARTIN , once again I make this offer , if you dispute anything I’ve said , PLEASE say ….. I will be delighted to show you the evidence.

          • Paid for from the revenues Jack. Just like quite a number of other things that are fully accepted, like railways, airports, roads etc etc. In USA there is even money left over to contribute to the PTA!

            You appear to be unaware of such normality. Sorry, my education assistance does not venture into such basics. There are classes available.

            • MARTIN

              The environmental and health costs of fracking , far outweigh the benefits.

              Do you dispute this ?????

              • Yes. Have done many times. You know this.

                But, you may find a new group, called residents of Ukraine, who may not debate so politely with you.

                • MARTIN ,

                  FRACKING

                  In going silent , employing your famous diversionary tactics on the matter or trying to convince people with your OPINION only .

                  Has always left you on the ropes when trying to sway people towards Fracking.

                  Why do you continue ??????

                  Fracking is a highly energy intensive, costly process that is dangerous to human and animal health, environmentally damaging, climate changing industry. That leaves a toxic , costly legacy for future generations.

                  It also will devalue hones in areas where Fracking takes place .

                  MARTIN , is lining the pockets of the chosen few , more important than the health of the people , the environment and climate change ???????

                  YES or NO answer please .

                  Once again I ask , if you dispute any of what I write in the above , please say . I will be more than happy to show my evidence in the form of LINKS from professional bodies of people / organizations…..

                  Remember MARTIN , if you do dispute what I have said please back up your comments with supporting evidence , or myself and the readers will take note that this is YOUR OPINION ONLY .

                • Ahh, the chosen few!

                  Oh dear, Jack, that chap who dropped out of college in USA to earn $60k/year washing dishes has been chosen.

                  Come on Jack. You can do better than follow the lefty herd. Try being an original, although your chosen name indicates you as a follower, so it may be a struggle-but, you would feel better for it.

                  Perhaps also remove the contradictions. You started off with all the money being lost, found that was no longer the case, and now pockets are being lined.

                  I would suggest you have reached your previous points where your willingness to contradict yourself, or another Jack, requires another rest, Jack.

                • NOW MARTIN ,

                  I’ve given this very simple explanation many times before .

                  The USA is only able to sell its highly expensive Shale Gas , which incidentally is still expensive, even with the bonfire of health and safety regulations and a two fingers approach to environmental concerns , because the much cheaper Russian Gas has become a no go zone ….

                  This only requires a nursery school level of intelligence to work this one out , why MARTIN do you keep promoting Jack for the same explanation ??????

                  [Text removed at poster’s request]

  3. Ceasing gas exports would significantly reduce imports. DUKES figures for 2020 show that the UK exports over 20% of the gas it produces. I suggest the exported gas would service more than 3 million homes and without the £millions required for new fracked sites, which would be better invested in renewable energy plus energy use reduction, thereby taking us towards net zero.
    One is reminded of the Gatwick Gusher which has turned out to be the Gatwick Dribbler, for an example of how the onshore fossil fuel industry oversells itself.
    Also of note is that the UK was a net exporter of oil in 2020 (UK Gov figures). Perhaps oil imports could be significantly reduced, to zero, if the UK didn’t export any.
    There is a paramount need to reduce our use of fossil fuels immediately.
    Try reading the recent Intergovernmental Panel on Climate Change report.
    This government continues to ignore all the the evidence by taking the wrong direction.

    • Malcolm: you realise that renewables are imported?

      I am not saying that there is not a need to target net zero, but we do not have the capability to acheive net zero in less time. Renewables only solve issues until the sun don’t shine and the wind don’t blow. (whiich you currently cannot store). Tidal is not there for 3million houses and you forget that oil and gas derivatives are also required, for the little things like toothbrushes, medical supplies, the manufacture of EV cars and jobs energy security and above all tax to the coffers.

    • Agree Malcolm, there are far better options available to us than fracking. And the CCC has warned the government it is heading towards missing its own carbon reduction targets. The facts speak for themselves. And for those that think we can’t afford Net Zero or reach Net Zero within the 2050 timescale, that is not what leading experts say, and that we simply cannot afford not to reach Net Zero in order to limit global temperatures. Achieving Net Zero is investing in a sustainable future, it is not a debt.

    • Malcolm, it is misleading to focus on the gas exports without considering imports, production and the net position.

      The figures for 2020 were:- gas production 438.3, imports 478.2, biomethane injection 6.3 and exports 105.9 TWh (export figures for 2021 are 29% lower).

      Therefore we exported 11.5% of the total gas that flowed through the UK system during 2020.

      Before suggesting that the exported gas could service more than 3 million homes, it’s important to bear in mind that some of this gas is from North Sea fields which are connected directly to Europe and that without significant storage facilities, the UK at times needs to export gas to Europe as a means of managing supply and demand.

      Stopping exports of gas from the UK system would not only create additional difficulties in managing demand, but would also cut off Ireland’s only route for imports and severely impact efforts to replace Russian gas imports into Europe with LNG from elsewhere in the world.

  4. KatT: Your really not getting this are you?,
    We are in Brexit mode, The highest interest rates on record, fuel prices ( i guess you drive, heat a home, eat?, the prices of all consumables like bread, milk etc is all going up in price). The demand, along with the uncertainty in the east etc, macroeconomics means there is a need to feed the ever increasing global population. As we consume, we need to replenish, supermarkets do it, why not energy firms?? The ill concieved anti’s agenda of not in my yard jack, and not under my house flo is ill informed and beyond your understanding. You realise that the world trades, and that lithium ore we use for EV cars does not come from the UK it gets mined and sold on world markets, the same as the engineering for wind turbines, the steel for tidal structures, the the same as gold, oil, gas, avaocadoes from chile, coffee from brazil.
    (you are probably consuming fracked gas shiped in from the USA!! Hahaha. and you didn’t even know it!! You realised there has been a UK Offshore Oil and Gas offshore bonanza for the last 50 years. But up until onshore prospecting was announce you suddenly woken up and said NO?

  5. Malcolm, you plonk out the same stuff about exports of gas and oil on a regular basis. Then, you receive an informed reply giving the reasons, and then you rinse and repeat a while later. Why? It is not as if DoD suddenly acquires new readers to be excited.

    This government is far further ahead with a move towards net zero than most others-including those who are suddenly having to ramp up production of oil and gas to help out those governments who made the wrong choices, excited by groups who needed placating. In USA there are even threats being made to those who are not drilling fast enough!

    If IGAS invest into fracking sites, they will still invest into other energy sources. That will not be precluded. If their fracking sites were a success they would have more cash to invest in other areas. Instead, LNG takes that investment to areas that are happily fracking away and then shipping the products thousands of miles, but keeping the investment for themselves.

    • It’s a Britishism Martin.
      We continue to bash pioneers in this country, as opportunists, capitalist and profiteers.

      Rather than embrace the need for energy and allow the companies to produce the energy they have been licensed to do. We don’t tell flo not to open a coffee shop, or dave to stop muck spreading his fields! There’s an increased entitlement in British cultural where the public this that the successful business person is getting one over on them and bitterly and jealously, they won’t revel in the success and windfall but the anti’s will continue to belittle, recycle, rewash and regurgitate anything in their toolbox to bash an industry which has allowed them the benefit of light, heat, medical and security.

      If they’ve something to be agitated about they should target the backbone of the government for initiating Brexit, and why there was insufficient foresight before the energy crush.

  6. This is fantastic news!

    If 80 wells can supply 3 million homes then Cuadrilla’s project 4,000 wells can supply 150 million homes or about 5.9 tcf of gas a year based on12000 kwh a household. We only have 27 million households in the UK!

    Igas seem to have found a way of making it so that between them and Cuadrilla they can supply more than twice the current energy demand of the entire UK.

    Well done guys!

    My only question now is “How?”

    • Mr Hobson, but surely when the wind is blowing, tide is high and sun is shining the rest of the 27m UK households can be accommodated by these means? Lol

      A stable balance of energy is the most secure. No one ever said it would be cheap for energy, and nor should it. We’ve just been accustomed to expect low cost, supermarkets, clothes, flight, car fuel and tech data, but why?

    • Since it took Cuadrilla from 2011 to 2019 to partially frack only two wells and not produce enough gas to light the flare stacks without the assistance of a Calor gas cylinder, I wish I Gas luck with their predictions of 5 pads with 80 operational wells in 12 to 18 months.
      I assume they would be foregoing bothersome things such as planning permission, regulator approvals and seismic testing and ignoring all public opinion and climate crisis concerns in order to build these 5 pads, each bearing 16 fully fracked wells plus all the infrastructure and supply chain required to serve their industry. Not forgetting, of course, that if by any chance any gas was to be produced it would be sold to the highest bidder on the open international market meaning it would make no difference to our energy bills. As Kwasi Kwarteng said, these are private companies. They’re not charities.

  7. Of course my anonymous little friend – if there is only a small requirement, because all of the other sources were providing most of it, the frackers might eventually be able to fulfil the rest (if they were allowed to cause the earthquakes that will come with them).

    My point is that their claim is ludicrously exaggerated.

    Sorry if I made that a bit too complicated for you to understand. I can try to dumb it down for you if you want.

  8. I think you already have, John. Did you miss geography? Maybe the answer might have something to do with two different areas.

    However, keep with the Fantasy Football Manager approach that you are more aware of data than the real managers, and it should keep you happy.

    Of course, there is only one way to really find out, isn’t there?

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