Industry

E Midlands fracks could supply 3m homes in a year and be less prone to earthquakes- IGas

The shale gas company, IGas, said today it could drill 80 wells by this time next year, with the “right government support”.

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

IGas also said fracking in its core shale gas area in the East Midlands had “a significantly lower chance” of causing earthquakes than Lancashire.

In interim accounts, the company said it had the potential to establish five production well pads, each with up to 16 wells, within 12-18 months.

Initial production from the sites could supply three million homes, the company said.

IGas currently has no shale gas sites with planning permission for drilling, testing or fracking. It suggested it needed changes to the current planning system to deliver its predictions:

“We look forward to working constructively with the new administration to achieve a streamlined regulatory process that can deliver accelerated development of this strategic natural resource.”

The current regulations on controlling fracking-induced earthquakes have also been a barrier in the past few years to shale gas companies. The traffic light system requires fracking to pause if it induces seismic activity of 0.5 or above on the local magnitude (ML) scale.

Cuadrilla’s three attempts at high volume hydraulic fracturing all caused small earthquakes above the 0.5ML level

But IGas today said the geology of its main shale gas area, the Gainsborough Trough in Lincolnshire and Nottinghamshire, was “less complex” than other parts of the UK. It said:

“we firmly believe that the geo-mechanics of the Gainsborough Trough present a significantly reduced risk of induced seismicity of the type experienced elsewhere in the UK”.

IGas also said there was a new method of assessing the likelihood of induced seismicity. This looks at the geo-mechanical history and setting of the area and analyses 11 key factors, the company said.

“Together with existing techniques, these give us a good idea of how likely we are to experience induced seismicity in a wider area and on a site-by-site basis.

“Using this method to supplement already existing techniques, the Gainsborough Trough, on a qualitative basis, can be demonstrated to have a significantly lower chance of induced seismicity when compared with the Bowland Basin in Lancashire.”

Further hydraulic fracturing in multiple wells was needed to test and calibrate the models, IGas added.

It said research on the new assessment method had been submitted to the British Geological Survey for its review of the science of fracking commissioned by the government. The review was submitted to ministers in early July but has not yet been published.

Revenue boost

IGas said the recent increase in oil prices and a weaker pound against the dollar had been “a welcome boost to revenue and cash generation”.

Despite a fall in production because of equipment failure, IGas saw revenues rise to £30.5m for the six months for the end of June 2022. This was up on £16.6m for the same time in 2021.

Profit was £19.4m, compared with a loss for the first half of 2021 of £12.2m. The company said it had reduced its debt by £4.6m.

Operating costs rose because of higher commodity prices, as well as increased costs for staff, materials and equipment.

Ellesmere Port write-off

The company said it had written off £6.4m exploration and evaluation assets for the Ellesmere Port licence area, PEDL184 in Cheshire.

This followed the refusal of planning permission in June 2022 for testing the Ellesmere Port-1 well.

IGas said:

“This licence, whilst prospective, is outside our core shale exploration area and, as the Group have no plans for further activity on the licence in the short term, the full capitalised amount has been written off.”

The company said it had also impaired £1.5m of previous costs in the Lybster licence, in Caithness. These were not expected to be recovered in any future development of the site, it said.

Plans

Oil

Corringham, Lincolnshire: IGas said an infill drilling project could add about 100 barrels/day in 2023. The proposal had planning permission and the company said it had applied for environmental permits.

Glentworth, Lincolnshire: DrillOrDrop has reported on plans for a new oil site. IGas said it proposed to drill an appraisal well and up to seven horizontal development wells. A planning application was expected in the final quarter of 2022, it said. If successful, this new site could target an additional 200 barrels/day, with potential to add another 500 barrels/day, the company said.

Geothermal

IGas described geothermal as a “truly competitive solution in a landscape of increased gas prices”. It said:

“We firmly believe that deep geothermal is the only utility scale source of renewable heat suitable for deployment in urban areas.”

The company said it had applied for a capital grant for its Stoke-on-Trent geothermal project from the Green Heat Network Fund. A decision was expected in the last quarter of the year.

It also planned to apply for grant funding from the Public Sector Decarbonisation Scheme to support six geothermal schemes supplying renewable heat to NHS trusts.

IGas said it was in discussions with 15 parties who want to buy geothermal energy, amounting to 100MW installed heat generation from 15 separate sites.

Key figures for six months to 30 June 2022

Revenue: £30.5m (same period 2021 £16.6m)

Oil sales in value: £27,343,000 (same period 2021 £15,284,000)

Oil sales in volume: 316,171 barrels (same period 2021 330,984)

Gas sales in value: £1,719,000 (same period 2021 £740,000)

Gas sales in volume: 938,203 therms (same period 2021 1,247,946 therms)

Earnings before interest, taxes, depreciation, and amortization: £10.7m (same period 2021 £2.7m)

Profit: £19.4m  (same period 2021 loss of £12.2m)

Operating cash flow: £16.4m (same period 2021 £6.4m)

Net debt: £9.7m (same period 2021 £13.2m)

Cash and cash equivalents: £2.7m (same period 2021 £2.8m)

Estimated energy profits levy: £0.2m

Net production: 1,865 barrels of oil equivalent per day (boepd) (same period 2021 2,005 boepd)

Estimated underlying cash operating costs per barrel of oil: $40.4/boe

Tax credit: £13.2m (same period 2021 £1.9m)

Investment in assets: £10.6m(same period 2021 £3.7m)

Debt repayment: £4.6m (same period 2021 £1.4m)

Total assets: £186,895,000 (same period 2021 £161,819,000)

Total liabilities: £98,373,000 (same period 2021 £61,905,000

42 replies »

  1. Time to advice all home owners and property developers to check their property insurance
    Or set money aside ‘just in case” fingers crossed and all that.

  2. Fracking should be banned especially for urban and populated areas where the Coal Authority hold records of past coal workings. There are areas (for instance) where houses and gardens are built on top of former coal workings, going back to the era of bell pits. Then the Coal Authority don’t have a full record of all of these, as new road workings and the like can still lead to the discovery of previously unrecorded mining operations. Each MP whose area has fracking potential should check these local dangers with the Coal Authority as should the Government. All this is costly work and it would be more sensible to just ban fracking completely. There are many properties which the Coal Authority periodically check to see whether past coal workings may be leading to any current dangers. An MP could submit a parliamentary question to discover how many such houses and the like the Coal Authority is currently keeping an eye on. I will forward this comment to my own MP.

  3. Seeing as B.P. p.l.c. sold the gas to china in 2015 ( here is a link to the story https://www.theguardian.com/business/2015/oct/23/david-camerons-40m-raised-from-chinese-visit-claim-under-scrutiny ) we won’t be getting any of this resource anytime soon.
    In fact, if were the Chinese, and I was guaranteed a million tonnes of gas per year I would sell it to the E.U. and there is nothing to stop me doing that.
    This island is about to be turned into the powerhouse FOR Europe, and with nobody to regulate their operations they will do it as cheaply as they can.

  4. Kenneth Lloyd BP do not Liquefy UK gas and sell it elsewhere. They produce LNG in other countries and trade it globally. Fortunately for us, other countries (primarily Norway for piped gas and Quatar for LNG) allow their gas to be sold to the UK, rather than keeping it to themselves. So – do you know which gas they promised to sell to China 7 years ago? https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-signs-gas-supply-agreement-with-enn.html

  5. If I Gas have £19 million profit in the first 6 months of ’22….why do they want Govt: grants to expand their business?

  6. Supply three million homes, let’s suppose they can, the gas would be just as expensive. So no cheaper energy and negligible impact on energy security. That means locals face the risk of earthquakes, suffer increased pollution, noise, traffic, associated health risks, spoiling of the countryside – just for more climate destroying, expensive gas.
    Looking at the figures put forward this would be intense, industrial operations with scant regard for planning, regulations and communities. It is also extremely optimistic for an unproven industry that is not even established.

    • KAT ,

      IGAS power 3 million homes 🤣

      Do you remember hearing 65,000 jobs and enough gas to power the UK for 50 years 🤣 ?????

      These companies will say anything to try and get the green light for their Fracking projects ..

      These companies would do better spending their valuable time writing childrens fantasy tales .

      Not only are the people against these projects on health and safety grounds , it is also opposed by animal welfare groups on health and safety grounds .

      https://www.nottinghamshirewildlife.org/news/misson-springs-success-exploratory-gas-drilling-extension-refused

      • Do you remember someone trying to indicate that fracking was doomed because Chesapeake Energy failed? When? In 2020!!

        Just look at them now!

        These individuals would do better to avoid setting their own traps and then falling into them.

        • OH DEAR MARTIN , back on to that old chestnut again.

          Chesapeake Energy, were a debt ridden huge white elephant of a company

          This war in Ukraine and the subsequent impacts on global oil/gas prices has been fantastic news for them.

          Like I’ve said , I could go through the laborious task of extracting Oil from discarded human toenail clippings and make a fortune at this moment in time .

          In the present climate, any white elephant company like Chesapeake Energy couldn’t help but make money .

          Any Oil/Gas that can’t make it pay at this moment in time , are beyond stupid .

          • Anyone who posted in 2022 that Chesapeake Energy is an example of how fracking in the USA is a financial disaster is beyond stupid.

            Just proves how links are often not what they are cracked up to be. In Jack’s case, nearly always.

            “Any Oil/Gas etc etc”!! Another contradiction. So, IGAS doing pretty well then Jack, and shareholders should be pretty pleased. Are there more than one of you Jack? Because if so, when the shifts change the one taking a rest should inform the replacement about the pearls of wisdom he has plonked out there.

            • Built up areas above former coal mining territory back to the era of Bell Pits would be in considerable danger from fracking. The Coal Athority periodically check such areas and hold telling records. But even then there are past mine workings in these areas which have never been discovered. Buiding by-passes and the like, unearths fresh problems areas. Safety first is needed in the areas clearly known to the Coal Authority.

            • MARTIN ,

              I hope your taking this in , because I’m getting SICK and TIRED of cutting and pasting the same thing , over and over again .

              Chesapeake Energy

              Here we go again.

              It seems that you do enjoy Jack , endlessly repeating the same things to you .

              OK , just for you MARTIN

              Regarding Chesapeake Energy , I said , quote,

              During ” normal ” oil prices Chesapeake Energy was a HUGE debt ridden, toxic, white elephant . With unsupportable debts of $9 BILLION …

              https://www.theguardian.com/environment/2020/jun/29/chesapeake-energy-fracking-pioneer-files-for-bankruptcy-owing-9bn

              Now at the moment during the current conflict with Russia, the very costly process of Fracking in the USA may be able to keep its head above the water line , but then so can anyone in the Oil and Gas industry.

              I could extract Oil from discarded human toenail clippings and become an overnight success during these uncertain times. Anybody who can’t make money at this moment in time in the Oil and Gas industry is beyond stupid and shouldn’t be in the business.

              BUT , what the forum members need to consider is this ….. What happens when this war is over and the price of Oil and Gas stabilize again??????? What happens as the world moves away from Fossil fuels .

              The answer for the Fracking industry is simple…………HUGE DEBTS , BANKRUPTCIES, and costly toxic legacies will be left for the ” good old taxpayers “, financial institutions, banks and pension funds to shoulder.

              Just look at American shale debt over 15 years .

              https://oilprice.com/Energy/Energy-General/US-Shale-Has-Lost-300-Billion-In-15-Years.html

              And you think this is a good thing , do you ???????

              • Jack,
                Your linked article is over 2 years old.
                The source of that – accurate – figure of $300 Billion debt is the highly respected accounting firm Deloitte.
                Suggest you view their most recent evaluation wherein they posit a $1.4 TRILLION in free cash flow in 2022 alone.

                FWIW, as a long time staunch booster of the US and Canadian unconventional industry, I am aghast at witnessing the ongoing self destructive policies embraced by European countries in these energy matters.
                You all are absolutely destroying your countries’ futures by not being open minded and effectively self educating in regards to developing the vast hydrocarbon bounty beneath your feet.

                • COFFEEGUYZZ

                  The war in Ukraine has been a fantastistic opportunity for a number of debt ridden white elephants to resurrect themselves .

                  Even the energy intensive ,
                  high cost fracking industry can hold its head above the water line during these difficult times.

                  BUT at what cost should Fracking be evaluated on in the UK ?

                  When Fracking is considered .

                  Fracking related sickness costs to the NHS and the costs of an increase in government social security benefits for the sick should be considered . The cost to wildlife and the farming community , the cost to the environment and climate change should all be factored in to the equation .

                  Also the future ongoing costs of maintaining abandoned wells and the depreciation of the value of homes in Fracking areas all need to be noted .

                  When taking note of the above , Fracking should NOT be considered on our densely populated island , especially when it has been shown that shale Gas estimates are 80% lower than first estimated .

  7. Oh I smell 💩 from the nimby’s swampy’s and those from a left-wing to far-left economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership.

    • OH DEAR ELI-GOTH ,

      So much bitterness , how much down are you on IGAS shares ???????? A lot of investors who initially lost the shirt of their backs with IGAS , will understandably be desperate to see their Fracking plans go ahead .

      What money does to some people , never ceases to amaze me .

      The narrative that people who oppose such projects are in someway ” swampy’s ” with far left leaning values shows how out of touch some people are with reality .

      People oppose these projects because they care about the health and safety of their families , they care about climate change , they care about the world that they will leave their children and they are very concerned about the collapsing value of their homes living bear to such a dangerous monstrosity , Fracking site .

  8. Sorry Ruth, someone obviously missed your facts within the previous piece on IGAS, where you stated share price had risen by over 500% over the last year. They also seemed to miss £19m profit in 6 months in this piece.

    Shows how out of touch some people are with reality.

    Then, “gas would be just as expensive”. No, it wouldn’t, KatT. Certainly not to the locals, and if the windfall tax continued, not to anyone. £60+/month starting next month. Antis wanted it, yet now try to deny the existence of it to produce a false narrative. What is the contribution from imported gas? Zilch!

    Looking at both comments, then there does appear to be a lack of consideration for the millions of people who are very much in touch with the reality of energy bills and see those examples from the antis just indicating a dogma, but not reality. IGAS financials show clearly how circumstances have changed. Anti comments show how they have been failed to realize what that means to millions of people.

    By the way, the most tried and trusted method for collapsing house prices is reduction in money available and dearer mortgages caused by rampant inflation!

    • OH DEAR MARTIN ,

      Having difficulty understanding the ” basic ” stock market charts are you ??????

      LET JACK HELP YOU.

      ( 1 ) Google search ” Igas share price ”
      ( 2 ) Above the graph you have 1D, 5D, 1M, 6M , YTD, More ……….. Click on ” More ”
      ( 3 ) Then click on ” Max ”

      Then be STUNNED as you see how IGAS has dropped from 11,543.25 to a current price of 69.00 .

      Have you ever seen such a mighty fall and as the graph shows , its still currently LOWER than a SNAKES BELLY.

      How did it drop so LOW you may ask , WELL after dropping like a brick , the share price was then diluted in to oblivion.

      So remember Ladies and Gentlemen, there will be a number of desperate IGAS investors , who will trying to push this project forward . SOME will only care about their horrendous loses , not the health and safety of you or your families.

      • OK, so you are now contradicting Ruth, Jack.

        Sorry, we have had this discussion about IGAS before. You don’t have a clue, Jack. Try not to embarrass the antis anymore. Your recent deviation to Chesapeake Energy is further confirmation that you are lost when you wade into such waters.

        By the way, investors have actually sued Tesla for loss of money! Others made a lot of money as they bought and sold at different times.

        I have provided the answer Jack to your other nonsense about health. Let me tell you again. If all these health issues are caused by fracking in the USA-the HOME OF LITIGATION-how come fracking is still booming in USA?

        [Edited by moderator]

        Property values also rise in fracking areas, Jack. I have provided a real example for you of booming supply businesses.

        So, well done Jack. All those links and all that shouting that just do not hold up to scrutiny. Many thanks for showing how you desperately try and equate a link to reality, and then end up with egg on your face when it does not.

        Goodness, if this is the best the antis can do, then IGAS share price is really undervalued.

        • GEEEEE WIZZ MARTIN,

          To put it simple for you , a 500% increase on nothing is still nothing .

          IGAS shares , after collapsing in value were then diluted in to oblivion . IGAS has dropped from 11,543.25 per share to a current depressing price of 69.00 per share , they are the FACTS .

          LET JACK HELP YOU understand how ” litigation ” works in the USA regarding Fracking.

          You talk about being a well traveled man/woman of the world , but your woefully , poor lack of understanding about other countries shows that in reality , you probably haven’t been further than your own garden gate .

          What I’ll do is do is try and explain this in real simple terms .

          In the home of litigation ,the USA , the way the Oil and Gas Industry works is quite simple.

          You may have a very strong case against a Fracking company , but unless you have an almost limitless supply of cash , the way these Fracking companies work is just to drag out the case for as long as possible , until you run out of cash paying your exorbitant legal fees .

          The case then collapses .

          The Fracking company then puts in a counter claim to recover their legal expenses , taking your last remaining assets and running you in to bankruptcy..

          This tried and tested policy serves as a WARNING to all others , who dare challenge the toxic , USA Fracking industry .

          • Just your opinion based upon absolutely nothing Jack. Pure speculation and fabrication.

            Again, you haven’t a clue and manufacture a load of nonsense. Tar away with that brush, Jack.

            Maybe if you had followed my advice and looked at the litigation against electricity distributers in USA, you would not have made such a fool of yourself.

            Is that really the best you can do? Show desperation and then fabricate and link it-yes, link it-to the antis? Good job, Jack.

            • HAHA MARTIN 😄

              Not my ” OPINION ” provable facts

              Just take a look with your own eyes .

              IGAS has dropped from 11,543.25 per share to a current depressing price of 69.00 per share , they are the FACTS .

              The share price is there for ALL to see .

              What’s the matter with you ??????

        • AND MARTIN,

          The only thing you EVER supply is your ” OPINION ” only .

          Never do you supply any evidence to support one thing you ever say .

        • Mr. Collyer,
          Any truly serious ‘student’ concerned about the health impacts of frac’ing – particularly water effects – can read the 2016 US EPA study on this topic.
          Actually a ‘meta’ study as it was an exhaustive review of 1,200 other studies encompassing millions of wells frac’d over 50 years’ time.
          Conclusion?
          No systemic issues at all.

          Should anyone wish to see with their own eyes the economic/social impact of effective development of hydrocarbon potential, do a quick google image search of the brand new, world class high schools in tiny Williston and Watford City, North Dakota.
          The families of these students have demonstrated just what prudent policies can bring about for their children.
          No worries about heat deprivation throughout the long, frigid ND winters, either.

    • MARTIN ,

      YES , there is a lack of understanding by some people and it is truly shameful.

      Tell JACK please ,

      Taking note of the serious proven health effects of Fracking , how much money is a woman with Fracking related Breast Cancer worth ???????

      https://www.bcaction.org/the-root-causes-of-breast-cancer/our-fossil-fuel-work/dont-frack-with-our-health/

      Will JACK get an answer , or will you pretend you’ve not seen the above ” link ” and divert on to some other gibberish ??????

      • Mr. Jack,
        Your link references the 2016 US EPA study that I mentioned earlier.
        Great.
        Have you read the ~700 page report (with an additional ~600 pages of appendicies?
        If you are not committed to that effort, try the ~30 page Executive Summary.
        Ýou will find – out of the analyzed tens of thousands of frac’d unconventional wells – only 3, count ’em, 3 – posed ‘questionable’ issues … Dimmock, Pavillion and Parker county.
        (After the report was issued, both Dimmock and Pavillion were found to be fraudulent events).
        Sincere efforts to evaluate these processes are warranted.
        To regurgitate provably false propaganda does a disservice to all involved.

        • COFFEEGUYZZ,

          Well why don’t you put up a ” LINK ” to this 30 page Executive Summary so we can all carefully read what you are trying to say ?????

          As far as pollution goes , the idea that ONLY 3 were questionable is 100% INCORRECT.

          What we can be 100% certain about is that the United States EPA walked away from investigating the widespread pollution/contamination claims ..

          This shameful failure that scientists have been highly critical about , has now shown that pollution from Fracking was in fact widespread.

          https://www.buzzfeednews.com/article/danvergano/fracking-in-wyoming

          • COFFEEGUYZZ,

            TO CLARIFY

            Although I have not read this 30 page Executive Summary which I ask you to provide a ” LINK ” to .

            I STRONGLY DISPUTE the findings of that report . It’s claim that only 3 wells were ” questionable ” is incorrect

            It has has shown that in fact , widespread pollution and aquafier contamination has occurred.

    • MARTIN

      Your ” OPINION ” on why house price ” collapsing ” occurs, DOES NOT RELATE to why they steeply drop in Fracking areas

      LET JACK help you understand.

      WARNING…… house prices will drop in value in Fracking areas .

      https://bestadvice.co.uk/house-values-will-be-hit-by-fracking-warn-estate-agents/amp/

      HOUSE price COLLAPSE in Fracking areas .

      https://www.telegraph.co.uk/finance/property/house-prices/11576180/Fracking-could-wipe-tens-of-thousands-of-pounds-off-house-prices.html

      People have NO INTEREST in buying a home in a Fracking area.

      https://www.nationalhomebuyers.co.uk/fracking-sites-affecting-buyer-interest-surrounding-homes/

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