Cuadrilla raises £37.5m for Lancs shale hunt

THE company whose efforts to find shale gas caused a series of mini-earthquakes in Lancashire last year has raised more than £37m from investors to carry on its exploration.

Cuadrilla Resources, which is jointly backed by Australian contractor firm Lucas and US-based investment funds held by Riverstone Capital and Carlyle Group, carried out five separate funding rounds between March 2011 and May this year, raising a total of $58.3m (£37.5m) from investors, according to newly-filed accounts.

Cuadrilla was set up in 2007 and is based at Lichfield in Staffordshire, although the focus of its operations is currently in Lancashire where it has several exploration sites set up to extract Bowland shale.

In November last year, the firm’s activities were identified as the probably source of a series of minor earthquakes that took place in April and May 2011 – after which it temporarily suspended operations.

However, the Department for Energy & Climate Change ruled in April this year that the company could carry on using hydraulic fracturing (fracking) as a method for accessing shale gas once strict measures are put in place to monitor seismic activity.

Cuadrilla has commissioned a report which estimates that around 1,700 jobs could be created in Lancashire over the next ten years on the basis of it operating 40 wells in the area. It added that many of these would be high-value engineering jobs in fields like seismology and geology, with an average wage of £55,000 a year. The firm currently employs 70 people.

Accounts for the year to December 31, 2011, show that the company earned revenues of £3.5m (2010: £136,000) from exploration activities  and £171,000 (£91,000) from electricity generated by gas extracted.

Despite this, exploration and other costs overshadowed early-stage revenues, meaning the firm declared a pre-tax loss of £12.3m (£17.3m).