IGas Energy plc aims to seek near-term profitable production projects and has abandoned plans to take legal action against the Government following last year’s reimposed moratorium on hydraulic fracturing.
SHALE GAS
The company said its portfolio of shale licences totalled 292,100 net acres with estimated mean volumes of undiscovered GIIP of 93 tcf.
In its full year results for the year ended 31 December 2022, interim executive chairman Chris Hopkinson added that IGas had taken advice and reflected on its strategic goals as a business.
“We continue to believe and assert that fracking for shale gas can and will be done safely and in an environmentally responsible manner.
“There is a significant recoverable gas resource in the Gainsborough Trough, the equivalent of up to 19 years of the UK’s gas demand, that could provide this country both energy security for years to come as well as providing billions of pounds of investment into the East Midlands and the creation of thousands of skilled jobs.
“It is unfortunate that this strategic resource is unlikely to be realised.”
The company said it had fully impaired its remaining shale assets and will fully abandon and restore the Springs Road well near Misson in Nottinghamshire by Q1 2024.
FINANCES
The groups’ results from its onshore UK oil and gas operations showed underlying operating profit of £16.1m (2021: £2m), and gross profit was £28.8m (2021: £14m).
Revenues were £59.2m (2021: £37.9m) and net debt reduced to £6.1m (2021: £12.2m) and cash balances were nearly even at £3.1m (2021: £3.3m).
Operating costs increased to £24m (2021: £19.1m) reflecting higher costs of materials, equipment and electricity, supply chain disruptions, and additional workover and maintenance activity.
Post-tax losses were recorded at £11.8 million (2021: loss of £6m), following a £30m impairment of its shale assets.
OPPORTUNITIES
Mr Hopkinson added that IGas aimed to pursue projects focused on production.
“The higher oil and gas prices have been a welcome boost to revenue and cash generation giving us greater financial flexibility and enabling us to repay debt.
“However, we believe now is the right time, given the prevailing price environment, to focus on driving opportunities for production, that pay back in a short time frame, and to that end we will seek to finance these near-term projects.”
The company will also seek shareholder approval at its general meeting in June to change its name from IGas to Star Energy Group plc, which it acquired in 2011.