Licences to produce gas in the Ryedale area of North Yorkshire have lapsed and the operator, Third Energy, has been acquired by a geothermal group.

CeraPhi announced yesterday that it had bought Third Energy, with plans to use the existing gas wells for geothermal heat.

DrillOrDrop can also reveal that four gas licences in the area have lapsed and another two are due to expire later this year.

Third Energy confirmed that it had reached agreement with the industry regulator to lapse licences PL077, PL079, PL089 and PEDL177. But the company has been allowed to retain ownership, rights and obligations on the wells.

Data from the North Sea Transition Authority shows that Third Energy’s other local licences, AL006 and DL005, are due to expire later this year. Third Energy confirmed that these licences would also be allowed to lapse but it would retain the wells.

The CeraPhi deal includes eight former gas production sites in Ryedale, with a total of 12 wells.

These include KM8 at the KMA wellsite in the village of Kirby Misperson. In 2016, this looked as if would be the first UK onshore well to see high volume hydraulic fracturing.

Daily anti-fracking protests in autumn 2017 made national headlines.

But Third Energy, then largely owned by Barclays Bank, failed government financial checks. The fracks were abandoned in 2018.

Since then, Third Energy has changed hands several times.

It was bought by York Energy (2019), a subsidiary of a US oil and gas company, and then the renewables group, Wolfland (2022).

CeraPhi’s acquisition includes the subsidiary companies Third Energy Trading Limited, Wolfland Renewables Limited, Wolfland Utilities Limited, Third Energy UK Gas Limited and a 50% holding in West Heslerton Renewables Limited.

In summer 2023, CeraPhi led a pilot geothermal project for Third Energy on the KM8 well.

Third Energy’s managing director, Russell Hoare, commented on this week’s deal:

“At Third Energy we’ve been pursuing a transition strategy for several years now with geothermal energy at the centre of that strategy and in CeraPhi we have found a capable and accomplished partner, as proven by the successful geothermal demonstrator project at our KMA site

“Bringing together the expertise of CeraPhi with the assets of Third Energy is a natural progression and I look forward to working with Karl [Farrow] and his team to continue the story.”

CeraPhi’s chief executive, Karl Farrow, said:

“The decarbonisation of heat represents a huge UK and global challenge in meeting our net zero targets. Combined with the continued insecurity customers face with volatility and seasonal cost of fossil fuels, we have to move geothermal energy to scale to reduce the cost of deploying direct use heat, which is an endless resource not subject to price fluctuation, enabling a move away from our dependency on fossil fuels within our day to day energy mix.

“By using the inexhaustible resource beneath our feet using closed-loop technology we can access this energy anywhere with zero environmental risk, requiring no hydraulic fracturing, no use of water and providing enough energy within the next 15 years to solve our energy crisis indefinitely.”

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