Ineos, the energy and petrochemicals company controlled by Britain’s richest man, has warned it could abandon its plans to frack in England unless rules governing the fledgling shale gas industry are relaxed.
The cost of long-term shale gas testing at Doe Green has forced one of the UK’s leading shale fracking prospectors, IGas Energy, to post losses equivalent to half of its annual revenue. The firm was forced to write-off just over £29m in exploration costs during the 2018 calendar year when it concluded the well was not suitable for commercial development.
IGas Energy’s revenue grew by 19.8% to £42.9m thanks to the impact of rising oil prices on the more than 2,200 barrels of oil it produces a day – mostly from conventional onshore drilling from its 100 UK sites. The firm’s hedged realised oil prices were up from an average of $51.3/bbl in 2017 to $57.4/bbl in 2018. As a result the firm’s adjusted profit (EBITDA) remained at a healthy £10.8m, having risen by 17.4% year-on-year.
But a £29.1m write-off from the Doe Green shale fracking exploration site led the firm to post a loss after tax of £21.4m, significantly down from the £15.5m profit after tax the firm made during 2017. Despite the loss IGas remains committed to developing the Tinker Lane and Springs Road fracking sites and remains optimistic about their viability.
The accounts serve to highlight the financial risk associated with the development of the UK’s shale fracking industry, particularly given the main competitors are smaller firms which lack the reserves to swallow such losses year in, year out. Only last week the Public Accounts Committee raised concerns over how these smaller firms would pay for decommissioning costs (EIA+P 05-Apr-19)
The government has confirmed that no guarantor is required to underwrite Third Energy’s commitments to frack one well a year in Ryedale, North Yorkshire, until 2022.
The energy minister, Claire Perry, replied that no guarantor was needed because the work programme was not an additional risk:
THE facts are clear, natural gas is a carbon-based fossil fuel and burning it contributes to changing our climate.
The Government’s Committee on Climate Change has said that we need to phase out its use domestically within the next six years.
In a huge win for protectors in the anti-gas fight, a tribunal of international legal experts has delivered a scathing report on fracking, arguing the unconventional gas and oil drilling method is a human rights violation.
The lorry-surfing protest happened about half a mile from Rathlin Energy’s West Newton-A site at about 10.30am. At the time of writing, the action was continuing. Humberside Police said a 43-year-old man has been arrested on suspicion of a road traffic offence. Another man has since been arrested.
ROSEACRE AWARENESS GROUP
AGM – 25TH APRIL 2019
7.30.PM AT THE DERBY ARMS, TREALES
- Introduction & Apologies
- Chair’s address
- Financial Report
- Election of Officers & confirmation of Constitution
- Decision re future of RAG
- Open Forum
- Date of next AGM
- Date of next RAG meeting
Cuadrilla called today for changes to the regulations on seismicity induced by fracking to take account of ground vibration.
The company has said current regulation, called the traffic light system, makes shale gas commercially unviable. It is based on the magnitude of tremors and requires fracking to pause if it induces seismicity measuring 0.5ML or above.
Six young people have blockaded a fracking seminar in London on Thursday.
The protestors, aged between 15 and 24, locked themselves together outside the event on the “unconventional oil and gas market in the UK”. The event promised to “assess the next steps for overcoming barriers to the commercialisation of domestic shale into the UK energy mix”.