Cluff Natural Resources (LON:CLNR) told investors that much of its executive time has been spent advancing its cooperation with Halliburton - which extends to both underground coal gasification (UCG) and conventional hydrocarbons.
The company, which today released interim results for the six months to June 30, highlighted that conventional hydrocarbons in the North Sea now represented a more immediate and tangible commercial opportunity to shareholders.
Efforts towards the company making a planning application for the Kincardine UCG project, in the Forth of Firth, have been put on hold amid political uncertainty in Scotland.
CLNR pointed to external factors such as the Scottish Government’s review of the country’s energy needs, for which a report is due next month, and a call from the Scottish National Party for the inclusion of UCG into a moratorium on Scottish onshore oil and gas, as well as the elections for Scotland’s parliament (expected in May 2016).
“We have deemed it prudent to await clarity on these matters before committing fully to, in particular, the expense of an Environmental Impact Study,” chairman Algy Cluff said in a statement.
“As a result, work on a planning application will likely be postponed until after such time as the political situation is more certain. Preparatory work including site selection studies, modelling and design work are however well underway.”
Offshore CLNR has eleven conventional blocks in the Southern North Sea, secured last December, and the company today said the assets have “even greater promise” than it originally anticipated.
These offshore assets contain already discovered fields that have the potential to benefit from fracking, it added.
The partnership with Halliburton is, in this context, particularly significant as the American group is a leader in offshore fracking and has experience in the nearby areas – where it worked on the nearby Breagh Field.
Alongside Halliburton, CLNR is working to select locations for drilling two appraisal wells which could be committed to in 2016.
Before that, CLNR added that it is currently working to calculate estimates of the projects’ potential gas-in-place during the fourth quarter of this year.
“The next twelve months may well see the creation of a new generation Cluff hydrocarbon company,” the chairman added.
CLNR, a pre-revenue company, reported a £744,668 loss for the six months to June 30. And the company ended the period with £1.94mln of cash.