IGas stepping up investment after rise in oil prices

Shale gas company IGas Energy is stepping up investment in the business due to improved oil prices.

In a trading update for the period from January 1 to June 30, today, the company said it has increased its commitment to further capital expenditure and now expects net cash capital expenditure for 2018 to be £11m.

Cash balances at June 30 were £14.5m, with a net debt of £6.8m.

It revealed that net production averaged around 2,300 boepd (barrel of oil equivalent) in the first half of 2018 and the firm is expecting average net production for the year to be around 2,200-2,300 boepd.

Operating expenditure is anticipated to be on budget at $32.5/boe, assuming an exchange rate of £1:$1.35.

Reporting on its operations, the company said its Stockbridge field recovery project has progressed with mixed results.

Its Albury gas-to-grid and power generation project remains on track.

The well has started to flow and full export of electricity will commence when commissioning of the relevant equipment is completed in August.

Pipeline construction is under way and full production start-up (up to 170 boepd) exporting to the grid is still anticipated in the fourth quarter of 2018.

The firm said, as announced last week it has lodged an appeal against the decision made by Cheshire West and Chester Council’s Planning and Licensing Committee, on 25th January 2018, to refuse planning consent for routine tests on a rock formation encountered in the Ellesmere Port-1 well, an existing well

While the application for its Ince Marshes site is complete, the company has taken the decision not to submit to Cheshire West and Chester Council until the outcome of the Ellesmere Port appeal is known

It also noted that on July 24, 2018, shale gas firm Cuadrilla received final hydraulic fracture consent from the Department for Business, Energy & Industrial Strategy (BEIS) for its first horizontal shale gas exploration well at its Preston New Road site in Lancashire.

IGas chief executive Stephen Bowler said: “With production broadly in line and a significantly higher oil price, we can begin to augment our conventional work programme from the opportunities we have identified for our producing assets.

“Last week, the Government awarded final consent to Cuadrilla to hydraulically fracture the UK’s first onshore horizontal shale appraisal well.

“This was a significant milestone for the industry and brings us a step closer to determining flow rates that will start to prove up the wider shale gas prospectivity.

“It also demonstrates continued commitment from Government at a time when the UK, and indeed the whole of Europe, is becoming ever more dependent on imports. We look forward to starting our own appraisal campaign in North Nottinghamshire soon.”

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