Cuadrilla’s Australian owner is to cut the value of UK shale gas exploration assets, following the reinstatement of the moratorium on fracking in England last year.
The mining group, A J Lucas Limited, said it had reviewed the value of the assets after what it called a “lack of discernible political will within the governing Conservative Party to progress onshore shale gas exploration in the foreseeable future”.
The scale of the impairment, announced in Cuadrilla Resources’ accounts for the year to the end of June 2022. was not revealed.
A J Lucas said the review happened after the end of the accounting period. The impairment would have implications for payments between companies in the group, it said.
The accounts also showed that Cuadrilla Resources made an annual loss of £127,000 in 2022, compared with a profit in 2021 of £115,000.
Cuadrilla recorded a loss of £38.5m in 2019 and £99,000 in 2018. (There were no comparable figures for 2020 because the accounting period changed).
In the 2022 accounts, the company described itself as “a pre-production exploration company with no sustainable income stream”.
It had three employees in 2022, compared with six in 2021. Staff and director costs were more than £400,000 in 2022. The payment to the highest-paid director was £268,000, up £36,000 on 2021.
According to the accounts, Cuadrilla Resources remains a going concern but it is reliant on financial support from A J Lucas to continue to operate.
Cuadrilla Resources’ only source of income was £384,000 in management fees from subsidiaries. The company owed nearly £110m in loans to related companies and to banks. Net liabilities remained at more than £45 million.
A J Lucas said in a letter to auditors that it would provide Cuadrilla Resources with support for 12 months from the date of approval of the financial statements.
But the auditors said there were “material uncertainties” disclosed in A J Lucas’s recent financial statements. They said the letter of support was “not a legally binding document” and there was “a material uncertainty on whether the required financial support will be provided”.
“Catch-22”
Cuadrilla said it was trapped in a “Catch-22 position” over the fracking moratorium, reinstated in October 2022.
The company complained that new wells needed to be fracked to gather scientific evidence on the process but, at the same time, new wells could not be fracked until the necessary scientific evidence had been gathered.
The company said it continued to “engage with the Government, regulators and other industry players to try and resolve this conundrum”.
It also said it continued to “advocate for much needed domestic gas production consistent with the UK goal of net zero CO2 by 2050”.
The “catch-22” phrase has been used by IGas in a letter to the government as the first step towards a legal challenge over the moratorium. The government’s response to IGas lawyers dismissed the claim:
“iGas is not in a catch-22 situation and there is no impediment to it making an application and/or submitting technical evidence, without the need for an application for judicial review.”
Key figures
Revenue from management fees to subsidiary companies: £384,000 (2021: £361,000)
Admin expenses: £512,000 (2021: £553,000)
Loss for the year: £127,000 (2021: profit of £115,000)
Total assets: £64,186,000 (2021: £64,426,000)
Total liabilities: £110,077,000 (2021: £110,190,000)
Net liabilities: £45,891,000 (2021: 45,764,000)
Average number of management and operational support employees: 3 (2021: 6)
Payroll costs: £405,000 (2021: £479,000)
Directors’ payments: £268,000 (2021: £232,000)
Payment to highest-paid director: £268,000 (2021: £232,000)
Accumulated tax losses (available to offset against future taxable income): £694,000 (2021: £574,000)
Unrecognised deferred tax asset for property, plant and equipment: £106,000 (2021: £106,000)
Amounts due to immediate parent company: £109,841,000 (2021: £109,862,000)
Amounts due to AJ Lucas Group: £53,000 (2021: £66,000)
Bank loans: £40,000 (2021: £49,000)
DRILL OR DROP? 
Albinoni’s ‘Adagio’ plays in the background, on the tiniest violin in the world.
But I understood that the Directors had already left this country to spend more time with their money ?
I wonder if site restoration will be left with the local tax-payers ?
Judging by the auditors’ comments it seems AJ Lucas say they will provide Cuadrilla with financial support for 12 months from the date of approval of the financial statements. However AJ Lucas’ letter to the auditors saying they would provide financial support to Cuadrilla is not a legally binding document and the auditors appear to have some ‘material uncertainty’ as to whether AJ Lucas would provide the required support. So there we have it, Genuine doubt over whether Cuadrilla can depend on financial support from AJ Lucas for even 12 months yet Cuadrilla applied for and have just been granted an excessive further two years to decommission and reinstate the site. How convenient. Lancashire County Council can’t say they weren’t warned by locals and activists that taxpayers could well be left picking up the cost for this.
Dutch to shut Europe’s biggest gas-field after quakes:
https://phys.org/news/2023-06-dutch-europe-biggest-gas-field.html#:~:text=The%20Netherlands'%20Groningen%20gas%20field,by%20Russia's%20war%20in%20Ukraine.
Time to sue the UK Plc for honouring licences, letting investors invest the literally pulling the rug! Let Lancashire pay!!
Lancashire parish councils, borough councils and county council all said ‘NO’ to Cuadrilla. Cuadrilla could have saved themselves a fortune if they’d listened to us.
Who is us? Do you own the land Pauline Jones?
The world where everyone is an ‘expert’!!
You said ‘Let Lancashire pay,’ Why should we when we Lancastrians said ‘No?’ As far as ‘letting investors invest’ is concerned, investors should be well aware that with any investment their money at risk, Those investors had no consideration for us.
The owner of the land where fracking takes place gets nothing but rent for the land but planning and other consents are required which the public can make material objections to the development. So not sure what your query about land ownership means, PJ is clearly speaking of decisions taken democratically to oppose fracking and public opposition with regard to “we”
I suppose you’ll be getting wind turbines in Lancashire instead, but again wind turbines will ‘NOT’ bring your energy bills down!
https://www.lancashiretelegraph.co.uk/news/23260897.new-wind-farm-built-lancashire-order-king/
And fracking wouldn’t bring down bills either
https://www.theguardian.com/environment/2022/jul/20/fact-check-why-fracking-uk-will-not-reduce-energy-bills
OMG, does anyone live in the real world, rather than believe what is an article in a particular paper?
Fracking, if successful, would bring energy bills down to locals if the sort of proposed deal that was being suggested last summer had been put into practice-over £800 off annual bill. Polling then showed that with this on offer support for local fracking rose from 29% to 53%.
The anti response? To state no, they did not recognize the data, now to quote the Guardian.
Then, there is this little thing called the Windfall Tax, that does indeed reduce all energy bills, not just to the locals. “Strangely” not levied on imported gas or oil.
It is Government policy that decides how much the consumer pays for energy. They have decided for UK it will be policy to add 7 new nuclear power stations for when the wind doesn’t blow. As with all power stations, they have decided the UK tax payer will pay. £200B latest estimate, but it will be more. The anti response? Oh yes, someone else will pay! Why? Because without the nonsense, the cheap renewable energy con has to be admitted. That is not a reason, it is a lame attempt to keep the con going. I just hope the new nuclear is more mechanically reliable than all those wind turbines that Siemens are having to repair.
I wouldn’t get too excited about Australian companies either. The “rescuer” of BritishVolt” would appear to be in a bit of trouble also!
Oh yes, and I noticed the other day one MP pushing for his share of the new nuclear kitty. Wonder which constituency he represented? LOL.
I am sure there are indeed items that could be isolated and weaponized with some degree of connection. This is not one of them. However, who am I to stand in the way of fantasy arithmetic comfort blankets? I await the next big one-like how and where will £20B/year fuel duty minus find a £20B/year tax plus? One might have thought such things would have been mapped out way before Paris for the public to observe, and the cynic would think he/she could believe why they were not.
MARTIN ,
Sadly old chap / old lady the readers will be starting to laugh at this , because it’s the same question they’ve seen me ask you a 100 times before 🤣
Here we go again 🤣 …… MARTIN show the readers exactly how this £200bn for the new generation of nuclear power will directly effect the UK Taxpayer . Prove to the readers this will be UK Taxpayers money and not private investment.
Here’s an interesting fact , did you know EDF are investing £ BILLIONS of their OWN money in to UK Nuclear power .
https://www.edfenergy.com/about/nuclear#:~:text=EDF%20is%20leading%20the%20UK%27s,currently%20available%20to%20the%20UK.
MARTIN , I’m a resident who stands to have their life blighted and cut short if people like you get their own way …. Tell me please , as I’ve asked you this same question a 100 times before, but failed to get a response …… What are your thoughts on Fracking and ” THE DIRTY DOZEN ” ??????? Shall we discuss from 1 – 12 , the horrors of Fracking ??????
( number 1 of 12 ) Studies have shown , how living in close proximity to a Fracking site increases your risk of Cancer …. What about that MARTIN , don’t you care about the health and wellbeing of UK citizens ?????
Well some of the readers will be laughing, Jack. They have been doing so for some time.
However, the anti readers who want their cause to be taken seriously, I fear, will find your magic nuclear power station tree full of £30B presents is hardly showing that the cause is being supported with such nonsense and must be thinking about Trojan equines.
I did go for a nice walk with someone yesterday who had just enjoyed a meal at one of the restaurants Sir Jim has invested in. Unfortunately, she indicated she paid a bill! A very big one.
So, my thoughts are still the same Jack. You haven’t a clue apart from somehow seeming to decide DoD is the venue that will allow you to demonstrate that.
I am sure EDF just like INEOS have their charitable causes, but UK energy market and £200B is investment, not charity.
Just make sure Jack, wherever you reside, you keep away from those electricity distribution lines and forests. May be difficult in UK Jack, as the powers that be intend there being a lot more of both.
MARTIN ,
Funding for the new generation of nuclear power stations.
Again I ask , you prove £200 bn of UK Taxpayers money will be used , instead of money from private investors
Failure to do so , will render your comments pointless , irrelevant , misleading and pure Collywaffle .
JACK,
To you Jack, but that makes me recognize they are correct.
By the way, I think-try it-EDF is not a private investor!
Sorry, Jack, the cat is already out of the bag. It is pretty easy to access generation costs for new nuclear, just look up for Hinkley Point. However, I may have missed the BOGOFF offer! Of course you may want to project antis are incapable of identifying any factual information. I would not be so rude.
MARTIN ,
Who owns EDF Energy ?????.
(A) The UK taxpayer
(B) The French State
MARTIN , I’m still waiting for your thoughts on Fracking and THE DIRTY DOZEN….. Why are you pretending not to notice my questions ?????
You are aware , that ALL the readers can also see your deadly silence on the matter.
MARTIN ,
If your struggling to work out the answer .
The answer is ” B ” the French State
Yes, Jack, the French State-and if you were aware, why all the nonsense?
Now they are going to donate £200B to the UK to renew and expand the UK nuclear energy generation!! According to??? Jack. Bless.
Now, I do like France, I do like the French, but I have little hope they are going to gift/donate their expertise and finance if it is not certain they will get a whacking great return-paid by the British tax payer.
Now, the French State may, or may not, subsidize energy supply to the French, but Jack a snowball in hell has a better chance than they will do so to the English! What next Jack? The TGV will suddenly be “donated”? Where is my free Citroen?