Ireland has joined the growing list of European countries with prospective areas for shale gas exploration. Yesterday Enegi Oil (LON:ENEG) was given an option over 495-square kilometres in the Clare Basin, in west Ireland.
“The initiation of a programme to search for shale gas In Ireland by Enegi should come as no real surprise given the work being carried out in the US, Canada and latterly the grab for licences in Europe,” Davy analyst Job Langbroek said in a note today.
Langbroek adds: “The arrival of Enegi mirrors the events in the rest of Europe, where other groups are examining the local geology for potential shale gas plays.
“However, the same issues that present on the continent are also likely to be found in Ireland, and it is likely that there will be considerable scrutiny of any progress – especially with respect to environmental issues.”
Yesterday Enegi chief executive Alan Minty said: "Enegi has adopted a strategy of reducing risk concentration.
“The award of this option demonstrates the commitment of the company to build a portfolio of assets where real value can be created whilst minimising the financial risk of the company."
The company will need to spend £500,000 on a technical programme before it can apply for an exploration licence.
Enegi reckons that the Clare Basin has the potential to contain shale gas.
“Well log analysis indicates the presence of a hot shale area, within the Clare Shale, that appears favourable for shale gas generation,” it said.