Cuadrilla’s Australian owner spent more than £0.75m in six months in the UK in 2023, more than double the amount in the previous year. But the company has no plans for future “substantive expenditure” on UK shale gas.

A J Lucas interim accounts, published yesterday, reported its UK operations spent Au$1.5m (£775,471) in the final half of 2023, compared with Au$0.7m (£361,886) in the same period in 2022.

The company said:

“These costs were incurred to support maintenance of the Group’s licences and revaluation of the Group’s decommissioning liabilities.”

Cuadrilla, a subsidiary of A J Lucas since 2020, has no oil or gas producing sites in the UK.

It has been ordered to plug and abandon its horizontal shale gas wells, at Preston New Road in Lancashire.  Fracking the wells induced earthquakes in 2018 and 2019.

A J Lucas said it remained “resolute” that shale gas had an important role as a potential transition fuel in the UK move to Net Zero by 2050.

It said it would “continue to pursue strategies to encourage the removal of the moratorium on shale gas exploration”.  

The moratorium on fracking in England was introduced in 2019. It was lifted briefly by Liz Truss in 2022 and reinstated immediately by her successor, Rishi Sunak.

A J Lucas said it saw “limited prospect of a change [on the moratorium] in the short term”. It said:

“as [a] result of the adverse political circumstances in the UK, the U-turn on the moratorium and the lack of discernible political will within the governing or opposition party to progress onshore shale gas exploration, the Group is no longer planning or budgeting substantive expenditure on further exploration and evaluation in its specific shale exploration licences areas.”

The company said:

“The Group continues to evaluate the full range of options available to protect and realise value from the substantial investment that it has made, in good faith, over many years. This may include potential organic cash flow generating opportunities.”

It said it would continue to “progress conventional gas opportunities” in its UK licences. This included restarting gas production at the Elswick site in Lancashire and using gas to generate electricity, the company said. The first electricity sales were due before the end of 2024, it said.

A J Lucas’s UK operation saw its profitability fall by more than 100% in the second half of 2023, compared with the same period in 2022. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were down from a loss of Au$737,000 in 2022 to a loss of Au$1,538,000 in 2023.

The group’s total net loss for the period was Au$2,538,000 compared with a loss of Au$157,205,000 a year ago, when it cut the value of UK shale gas assets by more than Au$157m.

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