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IGas unveils UK shale drilling plans and £23mln placing

IGas Energy today unveiled plans for a two well shale exploration programme in the UK. It is expected to cost £15mln and it will be supported by a new £23mln share placing.
IGas unveils UK shale drilling plans and £23mln placing

IGas Energy (LON:IGAS) today unveiled plans for a two well shale exploration programme in the UK.

The company struck its first shale discovery last year, while drilling coal bed methane targets at the Ince Marshes project, in Cheshire.

The discovery was confirmed as being part of the Bowland shale basin – which is where Cuadrilla’s large discoveries initially put Britain’s shale potential on the map.

IGas has been working on a possible farm-out of its UK shale acreage since the Ince Marshes discovery.

And it says the new work programme could ‘augment’ the value of the group’s shale business, by appraising its significant shale resources.

The drill programme is expected to cost £15mln and it will be supported by a new £23mln share placing, which was also announced today.

Gas plans to issue 24.3mln new shares at a price of 95p each.

The placing, which will also help fund the acquisition of the ‘conventional’ Singleton oil field, will be conducted through a ‘book-build’ process that’s being run by Jefferies and Canaccord. The book opens immediately and it will close at the discretion of the book runners.

"The developing supportive backdrop to the shale gas industry in the UK, both politically and geologically, leaves IGas well placed to exploit its significant potential resources,” said chief executive Andrew Austun.

“This fundraising allows us to further appraise our shale assets and augment value ahead of a potential farm out.

“The acquisition of Singleton plays an important part in this process by giving IGas a material increase in reserves and production with the associated cash flow to be used on our future shale activities.

“We are very excited about the future of the shale gas industry in this country and look forward to developing this potentially strategically important resource in the coming months and years."

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