Proactiveinvestors United Kingdom IGas Energy Plc https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom IGas Energy Plc RSS feed en Mon, 17 Jun 2019 14:35:29 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - UK gas industry boxed in as fracking tsar quits over strict rules and tremor myths ]]> https://www.proactiveinvestors.co.uk/companies/news/219292/uk-gas-industry-boxed-in-as-fracking-tsar-quits-over-strict-rules-and-tremor-myths-219292.html Britain’s shale gas industry is suffering a de facto ban according to Natascha Engel, who has just resigned as the government’s ‘fracking tsar’.

She left in a bid to highlight overly strict regulations that are causing potential projects to stall.

Yet again, we’re talking about politics and regulation rather than wells and production tests.

Set aside, for a second, the compelling argument that the UK has an opportunity to develop a seemingly abundant resource to the benefit of the national trade balance, and likely household purses too.

Ignore that the UK consumes more gas than it produces and must rely on imports of ‘dirtier’ gas from elsewhere.

Discount the fact that new industry would bring jobs and spur economic activity into the so-called ‘Northern Powerhouse’, and, that as Brexit looms Britain’s untapped shale gas resources likely represents decades of domestic ‘energy security’.

Then look at the awkward reality that gas is one of few sources of large scale and economically viable fuels from which the UK can base a cleaner energy mix.

Moreover, it is the primary source of heating for most homes in the country and it remains the only accessible means of heating a home for most people.

Speaking of homes, the objections to fracking are really cemented in more of a NIMBY (not-in-my-back-yard) stance rather than true environmentalism - after all, consumption of imported and transported gas has a substantially higher carbon footprint.

As such it is proving very difficult for onshore UK projects to secure planning permissions, even when the applications are being recommended by officials.

Even renewable projects such as wind farms have also struggled in this regard.

Tremor rules are stalling projects

Shale gas proponents believe that the parameters of the current rules are far too conservative, especially compared to other non-hydrocarbon based projects.

Rules supposedly aimed at preventing ‘mini earthquakes’ mean that operations in the field must be suspended for days at a time when a 0.5 magnitude tremor is detected.

For context, that threshold is around four times lower than in the United States and, even here in the UK, it is three times lower than the threshold imposed on construction sites.

The seismic monitoring and the attached ‘traffic light system’ capable of suspending work were caveats inserted into a regulatory framework that aimed to unlock shale projects.

It was effective in as much as it allowed a sprinkling of projects to move forward, nevertheless, the most recent evidence suggests that the pace of development is far too slow.

Natascha Engel claimed that environmental protest groups were presently ‘driving policy’.

Engel only served six months in here role as Commissioner for Shale Gas.

Cuadrilla says the impasse is “embarrassing” for UK

Unlisted Cuadrilla, the most advanced UK shale firm, was recently frustrated by the denial of planning permission for a new site in Lancashire and had been working through the stop-start fracking and testing programme at the Preston New Road site.

Efforts were stifled by the regulations, and that dampened enthusiasm for what had previously appeared to be an exciting success.

In a statement reacting to Engel’s resignation, Cuadrilla chief executive Francis Egan today said: “Natascha Engel has accurately assessed the current situation with regard to shale gas extraction in the UK.

“UK shale explorers have spent hundreds of millions of pounds proving that we have enough gas beneath our feet to supply homes across the country for the next 50 years.

“We can extract and deliver this gas safely and responsibly – helping to reduce emissions as we eradicate the need for imported gas, currently being shipped to the UK from across the globe.”

Egan added: “But instead of embracing this huge opportunity we remain wedded to a miniscule micro seismic threshold which has no scientific basis and is without parallel anywhere else in the world.

“Meanwhile other industries – including key Government projects like Crossrail, quarrying operations and geothermal – produce ground vibrations far in excess every working day.

“The situation is beyond ridiculous, it’s embarrassing.”

In London, AIM’s IGas Energy Plc (LON:IGAS) has seen drilling successes - most recently hitting over 250 metres of hydrocarbon bearing shale – but, the company has yet to reach the stage where it needs to start fracking (and adhering to the seismic monitoring).

Conventional onshore oil and gas face roadblocks too

Besides the frackers, other UK oil firms have struggled to gain planning approval for their projects.

Egdon, Europa and Union Jack Oil have been tangled in the application and appeal process at the Wressle project which could deliver significant production for each company.

A new public inquiry is due to take place later this year.

The breakout Horse Hill project has skipped over and navigated its regulatory requirements and operations are moving forward apace, though the roads around the Surrey project have not been without protests and an injunction was required to help protect the site.

The Holmwood project next door was stifled in planning, however, and leading Horse Hill partner UK Oil and Gas is now looking at alternative options having recently taken control of the venture.

Is the headache worth it for explorers and their investors?

While there are only few examples of listed companies investing in the UK onshore, it is plain that politics and regulation present the biggest challenges.

The uncertainties and risks of UK shale increasingly have little to do with the geology or engineering – which would be quite a rare claim to make for any projects elsewhere.

It had been the hope of many involved and invested in the industry that by getting the first few projects up and running without incident they would win hearts and minds, and, that the realities of shale gas and fracking would become evident.

That has yet to happen. And, it remains to be seen whether the enthusiasm of these early movers endures, or whether the nascent industry will be left with so much potential unfulfilled.

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Mon, 29 Apr 2019 16:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219292/uk-gas-industry-boxed-in-as-fracking-tsar-quits-over-strict-rules-and-tremor-myths-219292.html
<![CDATA[News - IGas Energy Springs Road well reveals significant shale sequence ]]> https://www.proactiveinvestors.co.uk/companies/news/216159/igas-energy-springs-road-well-reveals-significant-shale-sequence-216159.html IGas Energy Plc (LON:IGAS) has confirmed a sequence of hydrocarbon bearing shale over some 250 metres in the SR-01 well, at Springs Road in North Nottinghamshire.

Significant gas indications were observed, the company said.

Around 150 metres of shale core has been recovered, extensive wireline logging has taken place, and petrophysical and core analysis is currently being conducted. Subsequent results will provide further insight into the resource potential and shale characteristics.

READ: UKOG eyes long term production at Horse Hill

"I am delighted to report that we have recovered high-quality hydrocarbon bearing cores at our Springs Road site,” said Stephen Bowler, IGas chief executive.

“The data gathered to date shows that there are significant prospective resources in our East Midlands acreage and is another important step for the UK onshore industry.

Core sample retrieved from Springs Road well effervescing gas when immersed in water pic.twitter.com/nfwoa2CEoG

— IGas Energy (@IGasEnergy) March 11, 2019

“There is the potential for the gas beneath our feet to contribute materially to the UK energy needs.”

Bowler added: “Gas is important for our energy requirements, not least because over 80% of the homes across the country are heated by gas.

“These results come at a time when we are importing more and more gas from overseas and could stimulate investment in the East Midlands basin as well as improving the country's balance of payments."

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Mon, 11 Mar 2019 07:55:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216159/igas-energy-springs-road-well-reveals-significant-shale-sequence-216159.html
<![CDATA[News - IGAS Energy shares boosts as Cuadrilla get greenlight to start fracking in Lancashire ]]> https://www.proactiveinvestors.co.uk/companies/news/206990/igas-energy-shares-boosts-as-cuadrilla-get-greenlight-to-start-fracking-in-lancashire-206990.html IGAS Energy PLC (LON:IGAS) shares rose 12% in Friday afternoon’s deals as the path was cleared to allow shale gas Cuadrilla to start a fracking campaign in Lancashire.

It comes as the High Court in London dismissed a ‘last minute’ request made by protestors for an interim injunction to block the project.

Justice Supperstone concluded that there was no evidence to support the contention that LCC had breached any of the relevant duties concerning emergency planning, Cuadrilla said in a statement.

READ: Angus Energy shares rise as it reveals Balcombe well test results

Hydraulic fracturing operations at its Preston New Road shale gas exploration site, near Blackpool, will now get underway tomorrow (Saturday 13 October).

“We are delighted to be starting our hydraulic fracturing operations as planned,” said Francis Egan, Cuadrilla chief executive.

“We are now commencing the final operational phase to evaluate the commercial potential for a new source of indigenous natural gas in Lancashire.

“If commercially recoverable this will displace costly imported gas, with lower emissions, significant economic benefit and better security of energy supply for the UK.”

Egan added: “The hydraulic fracturing process will take approximately three months to complete for both horizontal exploration wells.

“Cuadrilla will then test the flow of natural gas from those two wells with initial results expected in the New Year.”

Cuadrilla’s Preston New Road project is at the forefront of the UK shale gas push, which has stalled somewhat due to frustrations in planning and permitting processes.

The legal greenlight is a boon for IGas Energy which also holds shale gas assets in North West England.

IGas shares were up 13p or 12.21%, changing hands at 119.53p.

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Fri, 12 Oct 2018 14:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/206990/igas-energy-shares-boosts-as-cuadrilla-get-greenlight-to-start-fracking-in-lancashire-206990.html
<![CDATA[News - IGas Energy sees increasing momentum for UK shale ]]> https://www.proactiveinvestors.co.uk/companies/news/184293/igas-energy-sees-increasing-momentum-for-uk-shale-184293.html The UK’s nascent shale gas sector is seeing increasing momentum, that’s according to IGas Energy Plc (LON:IGAS) chief executive Stephen Bowler.

Bowler, in the company’s interim results statement, highlighted that Cuadrilla is now drilling its first well at the Preston New Road project and in the next few months Third Energy is expected to start hydraulic fracturing at the KM8 well in North Yorkshire.

Elsewhere, INEOS has submitted further applications for shale appraisal and 3D seismic acquisition, he noted.

“Alongside this activity, given the proximity to our Weald Basin acreage, we also await with interest the results from drilling and flow tests in this area,” Bowler said.

“Encouragingly, there is a significant level of activity onshore UK, and over the next 12 months, the industry is expected to have over half a dozen operators either drilling or flowing wells, including a number from IGas.

“We look forward to the future with excitement not only for IGas, but for the wider UK onshore industry as security of energy supply and diversification of the UK energy mix becomes ever more critical."

In its financial results statement, IGas reported revenue of £16.8mln up from £12.1mln in the comparative six months of 2016, and it reported a £8mln profit after tax versus a £25.2mln loss last year.

IGas ended the period with £16.3mln of cash and equivalents.

Production from conventional oil and gas operations averaged 2,326 barrels oil equivalent per day, compared to 2,299 boepd in the same six months of 2016.

The company expects to produce an average of 2,250 boepd for the full year due to maintenance, with the exit rate for 2,500 boepd.

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Wed, 20 Sep 2017 10:42:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/184293/igas-energy-sees-increasing-momentum-for-uk-shale-184293.html
<![CDATA[Media files - IGas chief 'looking forward to getting on' with East Midlands drilling ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/7349/igas-chief-looking-forward-to-getting-on-with-east-midlands-drilling-7349.html Wed, 26 Apr 2017 17:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/7349/igas-chief-looking-forward-to-getting-on-with-east-midlands-drilling-7349.html <![CDATA[News - IGas Energy to start Midlands shale drilling this year ]]> https://www.proactiveinvestors.co.uk/companies/news/176910/igas-energy-to-start-midlands-shale-drilling-this-year-176910.html IGas Energy Plc (LON:IGAS) expects to start new shale drilling in the UK before the end of this year, and it is now looking at sites in the North West for its next projects.

It has been an early mover in UK shale, securing high potential acreage and bringing in major partners, but the emerging sector has been held back due to slow progress at local government level, in the planning process.

Recent breakthroughs, in 2016, saw IGas and its partners secure planning permission for two well sites in the Gainsborough Trough, in the East Midlands.

The wells will be paid for by IGas’s partners, as part of the US$230mln of work pledged in prior farm-out deals, and the company expects exploration wells will be spudded at these sites during the second half of the year.

WATCH: IGas chief 'looking forward to getting on' with East Midlands drilling CLICK HERE: For a daily round-up of all the Proactive news

IGas, meanwhile, has been evaluating seismic exploration data gathered across North West England. It is now “moving forward” with site selection and is advancing preparations ahead of the planning application process.

“We look forward to the next 12 months with confidence as both IGas and the wider industry start to drill and hydraulically fracture shale gas appraisal wells and collect important data for the future development of the UK shale industry,” chief executive Stephen Bowler said in the company’s financial results statement.

IGas “well positioned” after hitting financial reset

On a corporate level the group’s recent financial restructuring was the main point of discussion in the results statement.

The US$120mln restructuring saw the group exchange US$40mln of debt for new equity, in addition to a US$49mln bond buy-back and amendments to the terms for the remaining US$30mln of bonds.

At the same time, new investment came from strategic investor Kerogen Capital – a private equity group that’s taking interest in a number of UK focussed energy assets – which put in US$35mln in exchange for 28% of the company.

Bowler today told investors that IGas is now “positioned strongly for the future” as a result of the restructuring.

“We have a healthy balance sheet, supported by operating cashflow from our production assets, which will enable us to focus on delivering the significant potential of both our production and development assets and provide a solid foundation for the longer-term future of the company,” he said.

Conventional production forecasts

Aside from the shale business, IGas produced an average of 2,355 barrels oil equivalent per day from its conventional oil assets onshore UK, falling slightly short of the targeted range of 2,400 to 2,600 boepd.  In the year, the group’s operating costs amounted to US$28.8 per barrel and it reported an average pre-hedged realised oil price of US$44.1 per barrel (after including the impact of hedging it rose to US$58.1 per barrel).

IGas generated £30.5mln of revenue in the year, including £3.3mln from the sale of third party oil.

The company reported earnings of £10.2mln, albeit it marked a £31.8mln loss from continuing activities after tax – including £11.4mln of administrative expenses (up from £6mln the year before) and a £4.5mln write-off to exploration assets.

Looking to 2017, the company is forecasting conventional production of 2,500 bopd and operating costs of US$25 per boe which in current market conditions will make the business cash generative.

Boardroom changes

IGas confirmed, in a separate statement, that chairman Francis Gugen will step down in June and he will be replaced by deputy chairman Mike McTighe.

Senior independent non-executive director John Bryant will also retire from the board, and two appointees of Kerogen Capital - Philip Jackson and Tushar Kumar – will join the board.

Additionally, with the aim of reducing the size of the board, chief operating officer John Blaymires and chief financial officer Julian Tedder will step down from the PLC board – though they will both remain directors of IGas’s operating subsidiaries and will continue in their executive roles.

McTighe in a statement said: “I am delighted to be taking over the role of Chairman of IGas at this important stage of its evolution.

“IGas is in a strong financial position following the recent successful refinancing and can now capitalise on opportunities in its production and development assets at a time of increasing momentum in the UK shale industry.”

CLICK HERE: For a daily round-up of all the Proactive news ]]>
Wed, 26 Apr 2017 08:18:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/176910/igas-energy-to-start-midlands-shale-drilling-this-year-176910.html
<![CDATA[News - Kerogen Capital ends up with near 28% shareholding in iGas Energy following completion of its recent refinancing ]]> https://www.proactiveinvestors.co.uk/companies/news/176089/kerogen-capital-ends-up-with-near-28-shareholding-in-igas-energy-following-completion-of-its-recent-refinancing-176089.html Shares in iGas Energy PLC (LON:IGAS) ticked higher today as it was revealed that private equity fund manager, Kerogen Capital has ended up with a near 28% shareholding in the UK shale play following completion of its recent refinancing.

In lunchtime trading, iGas shares were up 1.3%, or 0.06p at 4.53p.

Unconventional Energy Limited, a vehicle of the oil & gas industry investment specialist has declared it now holds 679,282,165 shares in the AIM-listed firm, a 27.999% stake.

The Igas refinancing involved a US$35mln injection of fresh funds from strategic investor Kerogen and a debt-for-equity swap with its lenders.

According to the company, the new structure will be sustainable in the current oil price environment and will allow it to expand while maintaining its valuable carry agreements - some US$230mln of work to be paid by well-funded partners.

Last month, iGas received some positive operational news, securing approval for a shale gas well in Nottinghamshire.

In a later regulatory announcement, it was also revealed that another sector investment specialist, Trans European Oil & Gas Luxco has a 13.175% holding of 319,726,946 in  iGas.

Trans European Oil & Gas was established in 2015 to acquire and operate onshore oil and gas fields across Europe

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Thu, 06 Apr 2017 12:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/176089/kerogen-capital-ends-up-with-near-28-shareholding-in-igas-energy-following-completion-of-its-recent-refinancing-176089.html
<![CDATA[News - IGas Energy lands planning approval for another Nottinghamshire shale gas well ]]> https://www.proactiveinvestors.co.uk/companies/news/175187/igas-energy-lands-planning-approval-for-another-nottinghamshire-shale-gas-well-175187.html IGas Energy Plc (LON:IGAS) has positive operational news, it has secured approval for a shale gas well in Nottinghamshire.

It is good news for the company’s investors, new and old, who have been somewhat distracted with the group’s ongoing refinancing process - IGas is erasing more than US$100mln of debt through an equity swap and is bringing in US$60mln from a new cornerstone investor.

IGas told investors that Nottinghamshire County Council's Planning and Licensing Committee has decided to grant planning consent for a well site and one exploration well at a location referred to as Tinker Lane, near Barnby Moor, North Nottinghamshire.

Following after the approval of a planned site for two wells at Springs Road, also in Nottinghamshire, it is the latest boon for the onshore UK firm’s shale gas ambitions.

“At this stage we, as well as other onshore operators around the country, are trying to establish if the significant quantities of gas that we have identified exists in the right formations to be commercially prospective and address the issue of security of supply that we face,” said Stephen Bowler, IGas chief executive. 

“We now have the consent to develop a wellsite and drill an exploratory well, in addition to the Springs Road application that was granted in November.  Results from these wells will help us better understand the shale gas potential in North Nottinghamshire.”

Bowler describes says Britain’s energy mix is at a ‘critical juncture’ as the country looks to move away from coal towards lower carbon energy sources.

“We rely significantly on gas in the UK, not just for electricity, but also in heating 8 out of 10 homes and as a raw material in the manufacture of many everyday products.”

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Wed, 22 Mar 2017 07:20:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/175187/igas-energy-lands-planning-approval-for-another-nottinghamshire-shale-gas-well-175187.html
<![CDATA[News - IGas Energy confirms it will cut out US$112mln of debt though its financial restructuring ]]> https://www.proactiveinvestors.co.uk/companies/news/174969/igas-energy-confirms-it-will-cut-out-us112mln-of-debt-though-its-financial-restructuring-174969.html IGas Energy Plc (LON:IGAS) has revealed the extent of its proposed financial restructuring, with the debt-for-equity element expected to substantially reduce its debt.

The UK shale gas group told investors that it will reduce debt from US$122mln to a maximum of US$10mln by issuing new shares to its lenders.

At the same time, it is raising US$55mln of new equity in a share placing anchored by private equity group and cornerstone investor Kerogen Capital.

Existing shareholders will also be given the opportunity to buy new shares, via a US$5mln open offer.

All new shares will be issued at a price of 4.5p each (Thursday’s closing price was 5.25p).

IGas chief executive Stephen Bowler said: “We are pleased to announce the final terms of a restructuring package which, together with our new strategic investor, Kerogen, and the support of bondholders and shareholders would result in a strong balance sheet that, in this oil price environment, would enable us to focus on delivering the significant potential of our production and development assets.”

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Fri, 17 Mar 2017 08:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/174969/igas-energy-confirms-it-will-cut-out-us112mln-of-debt-though-its-financial-restructuring-174969.html
<![CDATA[News - IGas Energy notes changes to UK shale licences after INEOS bought ENGIE UK interests ]]> https://www.proactiveinvestors.co.uk/companies/news/174519/igas-energy-notes-changes-to-uk-shale-licences-after-ineos-bought-engie-uk-interests-174519.html IGas Energy Plc (LON:IGAS) confirmed that INEOS has completed its acquisition of interests in shale gas licences held by ENGIE E&P UK (previously GDF Suez).

It affects eleven onshore UK licences - in Cheshire, Yorkshire, Nottinghamshire, and Lincolnshire - where IGas is partnered with INEOS.

And the ‘carries’ agreed by ENGIE in prior farm-out deals with IGas are now assumed entirely by INEOS.

IGas has around US$260mln worth of exploration and development costs ‘carried’ by its larger partners via farm-out deals, and that remains a key asset for the group as it conducts a financial restructuring.

Restructuring to put IGas on sound footing

The UK shale gas group, which also produces over 2,000 barrels per day from conventional reservoirs, earlier this month revealed plans to raise US$35mln from new strategic investor Kerogen Capital alongside a debt-for-equity deal with its lenders.

It means there’ll be dilution for existing shareholders, but, the deal allows the company to alleviate financial pressures and ease its debt burden.

The extent of the debt deal has yet to be confirmed, so shareholders don’t yet know how much new equity will be issued, but, Cannacord Genuity, in a note, suggests IGas would at least half its indebtedness down to at least US$60mln, from around US$120mln.

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Thu, 09 Mar 2017 07:31:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/174519/igas-energy-notes-changes-to-uk-shale-licences-after-ineos-bought-engie-uk-interests-174519.html
<![CDATA[News - IGas Energy will be on a sounder footing after financial restructuring - broker ]]> https://www.proactiveinvestors.co.uk/companies/news/174020/ IGas Energy Plc (LON:IGAS) will be on a sounder financial footing as a result of its proposed restructuring, so says broker Cannacord Genuity.

The UK shale gas group, which also produces over 2,000 barrels per day from conventional reservoirs, has today revealed plans to raise US$35mln from new strategic investor Kerogen Capital alongside a debt-for-equity deal with its lenders.

It means there’ll be dilution for existing shareholders, but, the deal allows the company to alleviate financial pressures and ease its debt burden.

The extent of the debt deal has yet to be confirmed, so shareholders don’t yet know how much new equity will be issued, but, Cannacord Genuity, in a note, suggests IGas would at least half its indebtedness down to at least US$60mln, from around US$120mln.

WATCH: IGas CEO hails new investment ...

Significantly, the broker highlighted the positive impact of having Kerogen on board.

IGas in the basket with Hurricane Energy and Cuadrilla

Kerogen, which last summer raised US$830mln for its latest private equity energy fund, is a notable name on a number of oil and gas company’s registers – for example, it owns nearly a 30% of Hurricane Energy Plc (LON:HUR) and has a majority stake in AJ Lucus, which in turn owns 45% of UK shale pioneer Cuadrilla.

“The presence of Kerogen as a new strategic investor would be significant in our view,” Cannacord said.

The broker added: “We see its interest in IGas, which has a larger and more geographically diverse position in the UK shale play, as validation of its view of the long-term potential for UK shale gas and IGas's position.

“Activity in the UK shale gas play has been slow, but momentum is gathering with drilling, well stimulation, and testing of the play anticipated to begin later in 2017 with Cuadrilla and ThirdEnergy both operationally active.”

Elsewhere, WH Ireland commented: “Kerogen is contributing materially to the success of listed UK oil & gas growth companies.

“We note that equity holders are not being wiped out entirely and are being offered the opportunity to participate in the deal, we perceive this to be an act of goodwill given IGas is an obvious candidate to be taken private.”

A new sustainable structure

According to IGas, the new structure will be sustainable in the current oil price environment and will allow it to capitalise on value accretive opportunities whilst maintaining its valuable carry agreements (some US$230mln of work to be paid by well-funded partners).

Precise details of the dilution to shareholders have not yet been determined, as the quantum of the debt-for-equity swap is still to be finalised.

It is, however, currently anticipated that there’ll be a partial equitisation of the group’s secured bonds (presently there’s US$125.6mln outstanding) and the group’s unsecured bonds (US$27.4mln) will be fully equitised.

The debt will be converted to equity with some discount to the par value of the bonds. At the same time some US$13mln of bonds held by the company would be cancelled.

It is envisaged that the equity placing with Kerogen will be priced at around 4.5p per share (Tuesday’s close: 8.42p), and the company plans a further placing to offer other investors the opportunity to buy new shares at the same price.

IGas chief executive Stephen Bowler, in a statement, said: “This potential investment recognises the underlying value in the IGas group, both through its stable production assets, significant shale acreage and c.US$230m carry from its partners.

“Upon completion of the potential transaction, we would have a capital structure that we believe is sustainable in the current oil price environment and that will enable the company to capitalise on value accretive opportunities.

“We look forward to working with Kerogen Capital and our existing stakeholders to finalise the terms of the potential transaction."

IGas Energy shares were down 2.39p, 27.8%, trading at 6.19p each on Wednesday.

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Wed, 01 Mar 2017 13:17:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/174020/
<![CDATA[Media files - Potential new investment 'recognises the underlying value in IGas' says CEO Stephen Bowler ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/7019/potential-new-investment-recognises-the-underlying-value-in-igas-says-ceo-stephen-bowler-7019.html Wed, 01 Mar 2017 08:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/stocktube/7019/potential-new-investment-recognises-the-underlying-value-in-igas-says-ceo-stephen-bowler-7019.html <![CDATA[News - IGas Energy reveals debt restructuring plans, plus new US$35mln funding ]]> https://www.proactiveinvestors.co.uk/companies/news/173981/igas-energy-reveals-debt-restructuring-plans-plus-new-us35mln-funding-173981.html IGas Energy Plc (LON:IGAS) has launched initiatives that will reshape the UK shale gas group’s finances and capital structure.

The company is arranging a US$35mln injection of fresh funds from strategic investor Kerogen Capital, and it is also proposing a debt-for-equity swap with its lenders.

According to IGas, the company’s new structure will be sustainable in the current oil price environment and will allow it to capitalise on value accretive opportunities whilst maintaining its valuable carry agreements (some US$230mln of work to be paid by well-funded partners).

WATCH: IGas CEO hails new investment ...

The proposals will see a significant reduction in the group’s outstanding debt, but, it will also mean significant dilution for existing shareholders.

Precise details of the dilution to shareholders have not yet been determined, as the quantum of the debt-for-equity swap is still to be finalised.

It is, however, currently anticipated that there’ll be a partial equitisation of the group’s secured bonds (presently there’s US$125.6mln outstanding) and the group’s unsecured bonds (US$27.4mln) will be fully equitised.

The debt will be converted to equity with some discount to the par value of the bonds.

At the same time some US$13mln of bonds held by the company would be cancelled.

It is envisaged that the equity placing with Kerogen will be priced at around 4.5p per share (Tuesday’s close: 8.42p), and the company plans a further placing to offer other investors the opportunity to buy new shares at the same price.

IGas chief executive Stephen Bowler, in a statement, said: “This potential investment recognises the underlying value in the IGas group, both through its stable production assets, significant shale acreage and c.US$230m carry from its partners. 

“Upon completion of the potential transaction, we would have a capital structure that we believe is sustainable in the current oil price environment and that will enable the company to capitalise on value accretive opportunities.

“We look forward to working with Kerogen Capital and our existing stakeholders to finalise the terms of the potential transaction."

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Wed, 01 Mar 2017 07:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/173981/igas-energy-reveals-debt-restructuring-plans-plus-new-us35mln-funding-173981.html
<![CDATA[News - IGas Energy makes mandatory offer to redeem US$2.3mln of bonds ]]> https://www.proactiveinvestors.co.uk/companies/news/172339/igas-energy-makes-mandatory-offer-to-redeem-us23mln-of-bonds-172339.html IGas Energy Plc (LON:IGAS) notified investors that it has made a mandatory offer to bondholders to buy back some bonds.

The offer, to redeem US$2.3mln of bonds, will be open until March 1.

It comes as a result of the group’s bond terms which, among other conditions, requires the company to invest some US$15mln a year into its conventional oil operations whereas US$12.7mln was invested during 2016.

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Mon, 30 Jan 2017 07:44:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/172339/igas-energy-makes-mandatory-offer-to-redeem-us23mln-of-bonds-172339.html
<![CDATA[News - IGas Energy 'well progressed' with talks with potential investor ]]> https://www.proactiveinvestors.co.uk/companies/news/171006/igas-energy-well-progressed-with-talks-with-potential-investor-171006.html IGas Energy Plc (LON:IGAS) says it's "well progressed" with talks with a potential strategic investor, which could lead to a solution to its covenant breach issues.

A previously disclosed, the UK shale firm has recently met with certain bondholders and potential  investors to discuss a potential restructuring of the group and its finances.

However, it added today the caveat that there could be no certainty that an agreement will be reached or that a transaction will be forthcoming.

Currently, the firm expects to not be compliant with its leverage covenants (debt to cashflow) as at December 31 this year (2016).

But following legal advice, it said that if there is a breach, an equity cure provision exists within the bond agreements, such that a breach can be cured within 25 business days of the delivery of a compliance certificate.

For the 12 months to December 31 2016, the compliance certificate must be delivered by 30 April 2017, and accordingly the latest date for any equity cure would be early June 2017.

IGas says it continues to hold significant cash of around US$32 million as at December 22 this year and expects to remain compliant with its daily liquidity covenant until late March this year based on current forecasts.

It told investors today: "The board expects completion of the potential transaction would remedy any leverage covenant breaches as at 31 December 2016 and remedy the forecast breach of the daily liquidity covenants."

Shares eased 3.23% to 11.25p.

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Thu, 29 Dec 2016 08:08:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/171006/igas-energy-well-progressed-with-talks-with-potential-investor-171006.html
<![CDATA[News - IGas Energy says bondholder talks continue ]]> https://www.proactiveinvestors.co.uk/companies/news/169732/igas-energy-says-bondholder-talks-continue-169732.html IGas Energy Plc (LON: IGAS) has told investors that it is continuing discussions with its key bondholders, as well as a number of strategic investors.

“The company will present proposals in due course following the conclusion of these discussions, and will provide further updates as and when appropriate,” IGas said in a brief stock market statement.

The UK shale firm is working on a potential restructuring of the group and its finances.

It previously noted that one of its major bondholders had proposed that the company sell its conventional oil assets, which are onshore UK, in order to focus its resources on the shale gas opportunity.

The IGas shale opportunity

IGas’s shale opportunity gained momentum earlier this month as it was granted planning approval to drill two exploration wells to target shale gas resources in Nottinghamshire.

At that time, chief executive Stephen Bowler said: “At this stage we, as well as other onshore operators around the country, are trying to establish if the significant quantities of gas that we have identified exists in the right formations to be commercially prospective and address the issue of security of supply that we face.

“We now have the consent to develop a hydrocarbon wellsite and drill up to two exploratory hydrocarbon wells (one vertically and one horizontally) to help us better understand the shale gas potential in North Nottinghamshire."

IGas wants to drill two exploratory wells at the Springs Road site in North Nottinghamshire, within the PEDL 140 licence area.

The company - which operates PEDL 140, with a 32% stake alongside Total with 40% - believes the two-well programme will be an important step in understand the shale gas potential in North Nottinghamshire and more widely in the East Midlands and Yorkshire.

It has previously stated that successful wells would “in all likelihood’ lead to a subsequent planning application to flow test a well which would involve hydraulic fracturing.

Unlocking IGas Energy’s shale potential

Last month the company unveiled a new assessment of its shale gas assets, detailing some 11 trillion cubic feet (tcf) of potentially recoverable resources. It marks the portfolio as ‘world class’.

To put it into context, that’s enough to exclusively meet the UK’s entire gas needs for almost four years.

The figure comes from a third-party assessment of the assets, conducted by DeGolyer & MacNaughton (D&M), which estimates there is a Total of 102 tcf of shale gas in place across the IGas projects.

The 11 tcf figure is an estimate of the unrisked prospective resource, which accounts for the likely ‘productive area’ and recovery factor, a risked estimate factoring in presumed geological chance of success amounts to 2.5 tcf.

The new estimates came after D&M assessed the entire IGas UK asset base; D&M also upgraded the group’s conventional oil reserves.

Proved (1P) reserves Totalled 9.39mln barrels oil equivalent (boe) at the end of June 2016, up from 8.31mln, whereas proved and probable (2P) reserves amounted to 13.77mln boe.

Estimated contingent resources, meanwhile, increased to 21.83mln boe in 2016, from 12.67mln barrels in the year before.

IGas noted that the contingent resources include additional barrels within producing and undeveloped fields that can be readily developed with infill drilling and gas monetisation projects.

It added that several gas monetisation ventures are ready, requiring only sales agreements and final investment decisions before they can be advanced.

D&M calculated between US$195mln and US$277mln of future cash flows for IGas’s net reserves – and that’s despite IGas having seven fields that presently have zero reserves due to oil prices that render them uneconomic.

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Wed, 30 Nov 2016 07:27:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/169732/igas-energy-says-bondholder-talks-continue-169732.html
<![CDATA[News - IGas Energy gets green light for Nottinghamshire shale gas site ]]> https://www.proactiveinvestors.co.uk/companies/news/169015/igas-energy-gets-green-light-for-nottinghamshire-shale-gas-site-169015.html IGas Energy Plc (LON:IGAS) now has the green light for its proposed shale gas project at Misson Springs, in Nottinghamshire.

It now has planning permission to drill two exploration wells with a view to confirming the commercial potential of what are believed to be vast untapped gas resources.

IGas shares advanced as much as 25% immediately after the news.

Stephen Bowler, IGas chief executive, said: “At this stage we, as well as other onshore operators around the country, are trying to establish if the significant quantities of gas that we have identified exists in the right formations to be commercially prospective and address the issue of security of supply that we face.

“We now have the consent to develop a hydrocarbon wellsite and drill up to two exploratory hydrocarbon wells (one vertically and one horizontally) to help us better understand the shale gas potential in North Nottinghamshire."

Highlighting the lengthy but now cleared planning application, Bowler added: “It has been a long process and everyone has been extremely thorough. 

“We have engaged with the community at every step of the process through a local community liaison group. 

“This is important to us given we operate 30 fields across the country and understand how imperative it is to work in co-operation with local residents whilst we work safely and sensitively.”

The IGas boss also told investors that the UK’s energy sector is at a critical juncture, and emphasised his belief that gas from shale resources will play an important role in the future.

“We are at a critical juncture in the future of our energy mix and supply, as we move away from coal towards lower carbon energy sources,” he said.

“We rely significantly on gas in the UK, not just for electricity, but also in heating 8 out of 10 homes and as a raw material in the manufacture of many everyday products, including plastics and clothing.”

UKOOG highlights importance of UK shale

Ken Cronin, of the industry body for onshore operators, said: “UKOOG, the representative body for onshore oil and gas industry, is pleased that Nottinghamshire County Council’s Planning and Licensing Committee has granted planning consent for IGas’ application to develop a hydrocarbon wellsite and drill up to two exploratory wells in Misson Springs, North Nottinghamshire.

“This follows the successful applications for onshore oil and gas developments in North Yorkshire and Lancashire and shows positive momentum towards finding out what natural gas resources we have beneath our feet that can be developed for the good of the whole of the UK. 84% of our homes use gas for heating and by 2035 four fifths of that gas will come from outside the UK – that is why this is important.”

IGas’s plans for Misson Springs

IGas wants to drill two exploratory wells at the Springs Road site in North Nottinghamshire, within the PEDL 140 licence area.

The company - which operates PEDL 140, with a 32% stake alongside Total with 40% - believes the two-well programme will be an important step in understand the shale gas potential in North Nottinghamshire and more widely in the East Midlands and Yorkshire.

It has previously stated that successful wells would “in all likelihood’ lead to a subsequent planning application to flow test a well which would involve hydraulic fracturing.

Unlocking IGas Energy’s shale potential

Last month the company unveiled a new assessment of its shale gas assets, detailing some 11 trillion cubic feet (tcf) of potentially recoverable resources. It marks the portfolio as ‘world class’.

To put it into context, that’s enough to exclusively meet the UK’s entire gas needs for almost four years.

The figure comes from a third-party assessment of the assets, conducted by DeGolyer & MacNaughton (D&M), which estimates there is a Total of 102 tcf of shale gas in place across the IGas projects.

The 11 tcf figure is an estimate of the unrisked prospective resource, which accounts for the likely ‘productive area’ and recovery factor, a risked estimate factoring in presumed geological chance of success amounts to 2.5 tcf.

The new estimates came after D&M assessed the entire IGas UK asset base; D&M also upgraded the group’s conventional oil reserves.

Proved (1P) reserves Totalled 9.39mln barrels oil equivalent (boe) at the end of June 2016, up from 8.31mln, whereas proved and probable (2P) reserves amounted to 13.77mln boe.

Estimated contingent resources, meanwhile, increased to 21.83mln boe in 2016, from 12.67mln barrels in the year before.

IGas noted that the contingent resources include additional barrels within producing and undeveloped fields that can be readily developed with infill drilling and gas monetisation projects.

It added that several gas monetisation ventures are ready, requiring only sales agreements and final investment decisions before they can be advanced.

D&M calculated between US$195mln and US$277mln of future cash flows for IGas’s net reserves – and that’s despite IGas having seven fields that presently have zero reserves due to oil prices that render them uneconomic.

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Tue, 15 Nov 2016 13:41:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/169015/igas-energy-gets-green-light-for-nottinghamshire-shale-gas-site-169015.html
<![CDATA[News - IGas Energy shares up as it averts covenants breach ]]> https://www.proactiveinvestors.co.uk/companies/news/168498/igas-energy-shares-up-as-it-averts-covenants-breach-168498.html IGas Energy Plc (LON:IGAS) shares rose 11% as it got some breathing space through a bond sale, which mean it won't breach daily liquidity obligations this year.

As revealed last week, it expected a breach this week (week commencing October 31).

Now it has realised US$6 million selling secured bonds with a nominal value US$8 million at a 75% to par, which can be used for general purposes.

iGas now expects to comply with its daily liquidity covenant until March next year, when the next amortisation and interest payment is due in respect of the secured bonds.

The group added that it continues to talk to key stakeholders and strategic investors over options on a capital structure fitting for the current oil environment and allow it to capitalise on value  adding opportunities.

Shares added 11.65% to 12p.

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Thu, 03 Nov 2016 16:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/168498/igas-energy-shares-up-as-it-averts-covenants-breach-168498.html
<![CDATA[News - IGas Energy confirms talks with bondholders and new investors ]]> https://www.proactiveinvestors.co.uk/companies/news/168240/igas-energy-confirms-talks-with-bondholders-and-new-investors-168240.html IGas Energy Plc (LON:IGAS) has confirmed it is seeking a capital structure fitting for the current operating environment.

In a short stock market statement, IGas revealed it is in talks with key stakeholders including bondholder Trans European Oil & Gas, an associate of KKR, and it has proposed that IGas sells its conventional oil assets.

Bondholders split on new debt terms IGas’s UK shale estimated at 11 TCF IGas boosted by Westminster’s shale green-light

It is continuing discussions with key stakeholders as well as possible strategic investors, and it continues to assess its options with a view to securing a new capital structure that’s sustainable in the current oil price environment.

The IGas business comprises two distinctly separate divisions, one is a portfolio of high potential UK shale gas assets (where projects are supported by major partners) and the other is a group of conventional oil and gas production assets (which is expected to flow an average of 2,400 to 2,600 boepd for 2016).

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Mon, 31 Oct 2016 07:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/168240/igas-energy-confirms-talks-with-bondholders-and-new-investors-168240.html
<![CDATA[News - IGas bondholders split over new debt terms ]]> https://www.proactiveinvestors.co.uk/companies/news/168098/igas-bondholders-split-over-new-debt-terms-168098.html IGas Energy Plc (LON:IGAS) shares were lower heading into Wednesday’s close after bondholders cast their votes on proposals put forward by the company to relax liquidity obligations.

A quorate of holders of the group’s unsecured bonds (56.2% of voting bonds were represented at the meeting) voted unanimously in favour of the proposal to waive liquidity covenants, whereas 43% of a quorate of secured bond holders (68.6% of holders were represented) voted in favour.

As such waivers are now effective for the unsecured bonds, but the proposal was not approved for the company’s secured bonds.

IGas emphasised that it is in compliance with its liquidity covenants at present, albeit a breach is forecast to occur next week – which would give it 10 business days to remedy the situation before a default event under the secured bond terms.

It told investors it had US$27.5mln of cash, and it holds US$21.1mln of its own bonds.

In a statement the company said: “Notwithstanding the contractual requirements in the daily liquidity financial covenants set out in the bond agreements, the company therefore continues to meet, and expects to continue to meet, its actual ordinary course financing and trading obligations.”

IGas told investors that it continues to believe that a consensual solution is possible, and it said that would be in the interests of all stakeholders.

The company added: “From its various discussions and the result of the secured bondholders' vote, the board believes that there are divergent views among those bondholders.

“These include the preference for a capital restructuring of the group or a divestment of its conventional assets.

“The board will continue discussions with its key bondholders aimed at aligning those views.”

IGas also noted that it continues to pursue discussions with a number of possible strategic investors.

On AIM, IGas shares were down 1.25p or just over 9% changing hands at 12.5p before the close of trading.

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Wed, 26 Oct 2016 16:26:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/168098/igas-bondholders-split-over-new-debt-terms-168098.html
<![CDATA[News - IGas Energy’s UK shale gas resources estimated at 11 trillion cubic feet ]]> https://www.proactiveinvestors.co.uk/companies/news/167486/igas-energys-uk-shale-gas-resources-estimated-at-11-trillion-cubic-feet-167486.html IGas Energy PLC (LON:IGAS) has detailed some 11 trillion cubic feet (tcf) of potentially recoverable gas resources within its UK shale portfolio, which marks it as a ‘world class’ asset in the sector.

To put it into context, that’s enough to exclusively meet the UK’s entire gas needs for almost four years.

The figure comes from a third-party assessment of the assets, conducted by DeGolyer & MacNaughton (D&M), which estimates there is a total of 102 tcf of shale gas in place across the IGas projects.

The 11 tcf figure is an estimate of the unrisked prospective resource, which accounts for the likely ‘productive area’ and recovery factor, a risked estimate factoring in presumed geological chance of success amounts to 2.5 tcf.

The new estimates came after D&M assessed the entire IGas UK asset base; D&M also upgraded the group’s conventional oil reserves.

Proved (1P) reserves totalled 9.39mln barrels oil equivalent (boe) at the end of June 2016, up from 8.31mln, whereas proved and probable (2P) reserves amounted to 13.77mln boe.

Estimated contingent resources, meanwhile, increased to 21.83mln boe in 2016, from 12.67mln barrels in the year before.

IGas noted that the contingent resources include additional barrels within producing and undeveloped fields that can be readily developed with infill drilling and gas monetisation projects.

It added that several gas monetisation ventures are ready, requiring only sales agreements and final investment decisions before they can be advanced.

D&M calculated between US$195mln and US$277mln of future cash flows for IGas’s net reserves – and that’s despite IGas having seven fields that presently have zero reserves due to oil prices that render them uneconomic.

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Mon, 17 Oct 2016 08:04:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/167486/igas-energys-uk-shale-gas-resources-estimated-at-11-trillion-cubic-feet-167486.html
<![CDATA[News - IGas Energy calls bondholder meeting, seeks waiver to debt terms ]]> https://www.proactiveinvestors.co.uk/companies/news/167277/igas-energy-calls-bondholder-meeting-seeks-waiver-to-debt-terms-167277.html IGas Energy PLC (LON:IGAS) has called a meeting with its bondholders where it will seek waivers to obligations regarding its cash holdings.

The group, which has around US$27.6mln of cash, had previously flagged that in October it would reach a level of ‘non-compliance’ with the daily liquidity covenant written into its bond terms.

IGas is now seeking a temporary waiver to the bond terms, and it said the associated bondholder meeting would be a platform for talks to agree a sustainable capital structure for the group.

IGas noted that its significant cash resources are expected to be sufficient to meet its ordinary course financing and trading obligations for a sustained period of time, extending through and beyond the proposed waiver period.

The company added that it continues to pursue other options, including the sale of bonds or other assets or entering into a pre-paid swap of its oil production in 2017.

It noted: “At the same time, IGas continues to pursue discussions with a number of strategic investors and is evaluating options for cash and earnings accretive transactions, including farm-outs and other asset portfolio management opportunities to improve its cash position and de-leverage its balance sheet to achieve a capital structure that is sustainable in the current oil price environment, as well as enabling the company to capitalise on value accretive opportunities.”

The bondholder meeting will take place on October 26. If agreed, the waiver would become effective immediately.

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Wed, 12 Oct 2016 07:51:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/167277/igas-energy-calls-bondholder-meeting-seeks-waiver-to-debt-terms-167277.html
<![CDATA[News - IGas up over 30% as Westminster green-lights UK shale industry ]]> https://www.proactiveinvestors.co.uk/companies/news/167019/igas-up-over-30-as-westminster-green-lights-uk-shale-industry-167019.html Shares in IGas Energy PLC (LON:IGAS) gained more than a third at one point on Thursday as the government gave the UK’s nascent shale gas industry a shot in the arm.

Communities secretary Sajid Javid has overturned a planning decision made by Lancashire County Council and as a result privately-owned shale firm Cuadrilla has a green-light to test the potentially large gas resources in the Blackpool and Fylde area.

Cuadrilla’s proposal to drill and frack four horizontal wells from a single site was rejected by Lancashire County Council last year, against the recommendation of its own planning officer.

Today’s outcome has been described as a landmark decision.

Significantly for IGas it comes less than 24 hours after a decision on one of its shale projects was deferred by Nottinghamshire County Council following an eleventh hour legal appeal by conservationists – due to alleged threats to wildlife, including a rare type of owl and a form of lichen.

IGas’s proposal for two wells at the Springs Road project, formerly a Ministry of Defence missile launch site, was last week recommended for acceptance by a Nottinghamshire planning officer.

Nottinghamshire county council is now due to reconvene on the matter next month.

IGas’s frustrating delay is likely to fade quickly to the background now that Westminster’s pro-shale rhetoric has translated into tangible support for the industry.

Ken Cronin, chief executive of UKOOG, the onshore oil industry body, in a brief statement said: “The approval of the application at Preston New Road is an important step forward towards determining what gas resources we have under our feet, with the aim of developing a sustainable onshore natural gas exploration industry in the UK.

“We need the gas to heat our homes, produce electricity, supply our industries and to reduce our dependency on imports.

“The onshore oil and gas industry is committed to producing this gas in the safest and most environmentally sensitive way possible and to creating jobs and opportunities in the supply chain.”

On AIM, IGas Energy shares climbed 4p, 33.5%, to change hands around to the 16.2p level.

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Thu, 06 Oct 2016 11:27:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/167019/igas-up-over-30-as-westminster-green-lights-uk-shale-industry-167019.html
<![CDATA[News - Westminster approves Cuadrilla fracking project in Lancashire ]]> https://www.proactiveinvestors.co.uk/companies/news/167018/westminster-approves-cuadrilla-fracking-project-in-lancashire-167018.html UK shale gas firms have received a boost as Westminster has now overturned Lancashire County Council’s decision to reject Cuadrilla’s application for a horizontal well.

Cuadrilla now has a green-light to drill and frack four horizontal wells from one site in order to test the potentially large gas resources in the Blackpool and Fylde area.

The UK government’s communities secretary Sajid Javid approved the plans after Cuadrilla appealed a decision made by Lancashire County Council last year.

Cuadrilla’s proposal had been approved by the council’s own planning officer prior to the application’s rejection.

The company has now been granted permission for the Preston New Road site, near the village of Little Plumpton in Lancashire.

Today’s outcome has been described as a landmark decision.

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Thu, 06 Oct 2016 10:54:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/167018/westminster-approves-cuadrilla-fracking-project-in-lancashire-167018.html
<![CDATA[News - Decision on IGas shale project deferred, attention turns to Cuadrilla and govt decision ]]> https://www.proactiveinvestors.co.uk/companies/news/167004/decision-on-igas-shale-project-deferred-attention-turns-to-cuadrilla-and-govt-decision-167004.html IGas Energy Plc (LON:IGAS) will learn whether or not it can drill two shale wells in Nottinghamshire after Westminster makes its call on Cuadrilla’s planning dispute with Lancashire County Council.

A final decision on Cuadrilla’s project, near Blackpool, is expected from Communities Secretary Sajid Javid later today.

In a brief stock market statement, after Wednesday’s close of trading, IGas told investors that the decision on its application for a two-well shale gas project in Nottinghamshire was delayed at the eleventh hour, due to a legal appeal by conservationists.

IGas wants to drill wells at the Springs Road project, formerly a Ministry of Defence missile launch site.

Whilst the group’s application had been recommended by Nottinghamshire’s planning officer, the council meeting deferred making a decision to consider a late legal representation. Conservationists claimed the proposed work would be illegal as the area is protected fenland, home to rare long-eared owls and lichen.

Nottinghamshire county council is now due to reconvene on November.

IGas’s frustrating delay is likely to fade quickly to the background, however, as attentions switch to a potentially significant decision over Cuadrilla’s disputed fracking application for a project near Blackpool.

Cuadrilla last year had its application denied, against the planning officer’s recommendation. The rejection was based on the anticipated impacts of noise and traffic.

The privately owned shale gas firm’s appeal followed, and the Department for Communities and Local Government received a Planning Inspectorate report in July.

Three months on Javid is due to make the final decision.

Earlier this year another privately owned shale group, Third Energy, was given permission for a fracking project in North Yorkshire, though the approval was followed by a request from Friends of the Earth for a judicial review which is now due to take place next month.

Javid’s decision on Cuadrilla’s plans will be closely watched on all sides of the debate, and could set the tone for nascent unconventional energy industry.

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Thu, 06 Oct 2016 07:37:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/167004/decision-on-igas-shale-project-deferred-attention-turns-to-cuadrilla-and-govt-decision-167004.html
<![CDATA[News - IGas Energy says “consensual resolution” to debt negotiations is likely ]]> https://www.proactiveinvestors.co.uk/companies/news/166753/igas-energy-says-consensual-resolution-to-debt-negotiations-is-likely-166753.html IGas Energy PLC (LON:IGAS) told investors it believes a “consensual resolution” to debt negotiations is likely following constructive discussions with its new largest secured bondholder.

It explained that its point of view is based on the understanding that the bondholders would face a potentially significant loss of value if such an agreement can’t be reached.

Chief executive Stephen Bowler added that talks are also underway with possible new strategic investors.

“We acknowledge the challenges that our current capital structure presents and are engaged with our bondholders and potential strategic investors to right-size our balance sheet in light of the current oil price environment,” he said.

He also noted that IGas’s shale gas business could potentially see de-risking catalysts soon.

Bowler explains: “There is potential material upside in our assets and the next few weeks will see important news flow for the UK shale industry with the upcoming decision from Government on the appeals by Cuadrilla and the determination of our Springs Road planning application."

The resource company, meanwhile, used its interim results statement to highlight the value of its assets.

Third party estimates put the value of the group’s proved and probable (2P) reserves at US$287mln (based on a forward oil curve that sees crude prices gradually recover to around US$80 by 2020). It has 13.77mln barrels of conventional 2P reserves, and 21.96mln barrels of contingent oil resources.

UK shale gas resources are, meanwhile, estimated at 2.5 trillion cubic feet, which is equivalent to 440mln barrels oil equivalent. A value is not given for these resources, which require more evaluation before they can be considered commercially viable.

Advancing the shale gas interests is a key focus for IGas, and an important milestone is now approaching. A planning application for a two well programme, partnered with French major Total, will be considered by Nottinghamshire County Council committee in the first week of October.

Earlier this week the council’s planning officer recommended the application for approval.

The two well programme is part of the group’s five year shale development plan.

IGas’s conventional oil business, meanwhile, yielded 2,299 barrels oil equivalent per day (boepd) in the six months period, compared to 2,540 boepd in the comparative months of last year.

It expects that production for the full year will be in the range of 2,400 to 2,600 boepd.

In interim results for the six months ended June 30, released this morning, IGas reported revenue of £12.1mln, compared to £17.6mln in the corresponding period of 2015, and reported adjusted earnings (EBITDA) of £5.1mln versus £7.4mln. Operating costs were cut to US$27.5 per barrel, from US$31.

It had a £25.2mln loss after tax, compared to £19.3mln loss in the first half of last year.

Based on current forecasts IGas will be in ‘non-compliance’ with its daily liquidity covenants by the second half of October, and the leverage covenants will be tested against full year financial results due for publishing in April 2017.

IGas highlighted that it retains significant cash resources of US$27.6mln, following a scheduled US$9.6mln interest and amortisation payment to bondholders in September. The company noted that it holds US$21.1mln of its own bonds.

The liquidity covenant currently requires IGas to maintain at least US$25.9mln of cash.

Bowler concluded: “The cost saving initiatives we put in place are continuing to benefit our operational cash flows and production rates are also improving since the period end, currently c.2,600 boepd.”

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Fri, 30 Sep 2016 08:42:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/166753/igas-energy-says-consensual-resolution-to-debt-negotiations-is-likely-166753.html
<![CDATA[News - IGas shale gas plans are recommended ahead of Nottingham council decision ]]> https://www.proactiveinvestors.co.uk/companies/news/166610/igas-shale-gas-plans-are-recommended-ahead-of-nottingham-council-decision-166610.html IGas Energy Plc (LON:IGAS) and French major Total have moved a step closer to realising plans to drill two shale gas well in Nottinghamshire.

The AIM quoted company has revealed that a planning officer has recommended that the Nottinghamshire County Council’s (NCC) planning and licensing committee grant planning consent for the well programme.

Councillors will now come to a decision on October 5.

IGas wants to drill two exploratory wells at the Springs Road site in North Nottinghamshire, within the PEDL 140 licence area.

The company - which operates PEDL 140, with a 32% stake alongside Total with 40% - believes the two-well programme will be an important step in understand the shale gas potential in North Nottinghamshire and more widely in the East Midlands and Yorkshire.

It has previously stated that successful wells would “in all likelihood’ lead to a subsequent planning application to flow test a well which would involve hydraulic fracturing.

In a statement the company said it had addressed a wide range of questions, concerns and comments raised by NCC, statutory consultees and others.

“As part of its commitment to open and transparent communications IGas has undertaken extensive community engagement alongside this application including setting up a community liaison group which was convened in June 2014,” it added.

“IGas businesses have been drilling wells and producing oil and gas safely and in an environmentally responsible manner for over 30 years and we will continue to uphold the highest standards in the future.”

Alongside IGas and Total, AIM quoted onshore oiler Egdon Resources Plc (LON:EDR) has a 14.5% interest in PEDL 140 and US shale firm eCorp International has 13.5%.

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Wed, 28 Sep 2016 11:15:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/166610/igas-shale-gas-plans-are-recommended-ahead-of-nottingham-council-decision-166610.html
<![CDATA[News - Labour vow to ban fracking sparks industry warning ]]> https://www.proactiveinvestors.co.uk/companies/news/166458/labour-vow-to-ban-fracking-sparks-industry-warning-166458.html The Labour Party will ban shale gas fracking in the UK if it wins power, but the news prompted a warning from the industry.

Shadow energy secretary Barry Gardiner said Labour in government would stop the practice because it was not compatible with a low-carbon energy policy and efforts to tackle climate change.

"Fracking locks us into an energy infrastructure based on fossil fuels long after our country needs to have moved to clean energy,” the BBC quoted Gardiner as telling the party’s annual conference in Liverpool.

Environmental campaign groups applauded Labour’s announcement, which could affect companies such as IGAS Energy PLC (LON:IGAS) and Egdon Resources Plc (LON:EDR) if the party is elected.

A Greenpeace spokeswoman said: “With opposition to fracking an all-time high across the country, this ban on an unproven and inexperienced industry will be widely welcomed.“

Friends of the Earth (FoE) has also highlighted public opposition to the practice, saying only 33% of people polled in a recent survey would support fracking in their local area even if households were paid up to £10,000 in compensation payments.

But the UK Onshore Oil & Gas (UKOOG) lobby group said shale gas was 15% less carbon-intensive than imported gas.

UKOOG chief executive Ken Cronin said: “If we want to maintain the right of the general public to access heat and power securely, manage climate change and create UK-based jobs then we need to develop renewables, nuclear and natural gas from shale.

“To go for a narrow one-size-fits-all approach will lead to more imports and a detrimental impact on the environment and economy.”

Meanwhile, The Times reported that the Advertising Standards Authority (ASA) has rebuked FoE in a draft ruling about an anti-fracking leaflet.

According to the report, the ASA says FoE failed to substantiate claims that fracking could cause cancer, contaminate water supplies, increase asthma rates and send house prices plummeting.

FoE has reportedly requested more time to challenge the findings.

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Mon, 26 Sep 2016 13:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/166458/labour-vow-to-ban-fracking-sparks-industry-warning-166458.html
<![CDATA[Media files - IGas Energy Plc COO says shale gas consultation won't affect industry plans ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/5375/igas-energy-plc-coo-says-shale-gas-consultation-won-t-affect-industry-plans-5375.html Mon, 08 Aug 2016 10:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/5375/igas-energy-plc-coo-says-shale-gas-consultation-won-t-affect-industry-plans-5375.html <![CDATA[News - Shares in frackers rise as government unveils compensation plan ]]> https://www.proactiveinvestors.co.uk/companies/news/129106/shares-in-frackers-rise-as-government-unveils-compensation-plan-129106.html Shares in oil & gas companies considering using fracking rose on Monday after the government announced plans to compensate residents affected by the controversial extraction technique.

IGAS Energy (LON:IGAS) jumped 4.3p, or 32%, to 18.85p and Egdon Resources Plc (LON:EDR) lifted 23%, to 13.35p on news that ministers would give local people part of the tax proceeds from fracking.

The move represents a change from original plans for a £1bn "shale wealth fund" under which up to 10% of the tax proceeds from fracking had been due to go to councils or community groups.

It is reportedly thought that individual households could receive between £5,000 and £20,000 from a total compensation pot of about £10mln.

The industry is thought likely to welcome the proposals tabled by new premier Theresa May as a way to reduce opposition to fracking in affected communities.

VSA Capital Research analyst Ed Vaughan said in a note: "By handing proceeds directly to local residents, these proposed changes could increase support for fracking."

But environmental campaigners branded the move as a bribe which could slash the cash available for other local priorities like infrastructure projects.

Greenpeace UK chief scientist Doug Parr said: "The government has tried to sweeten the fracking pill with cash payments before, and it didn't work.

"People's concerns about climate change and their local environment cannot be silenced with a wad of cash.

"If Theresa May wants to show the UK is open for business, she should reverse the policies that have harmed our vibrant clean energy sector and back technologies that can supply cheap, homegrown energy for decades to come."

VSA's Vaughan said there were several "catalyst" events in the rest of 2016 which may give UK shale players a boost including IGas Energy's application to drill at Springs Road in north Nottinghamshire.

The local council’s planning committee is due to consider the application in October.

Vaughan added: "We view Egdon Resources as an attractive way for investors to gain exposure to this industry and have a 'buy' recommendation and 38p target price."

 

--update share prices--

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Mon, 08 Aug 2016 09:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/129106/shares-in-frackers-rise-as-government-unveils-compensation-plan-129106.html
<![CDATA[News - IGas Energy hires Mike McTighe as new deputy chairman ]]> https://www.proactiveinvestors.co.uk/companies/news/128941/igas-energy-hires-mike-mctighe-as-new-deputy-chairman-128941.html IGas Energy Plc (LON IGAS) has announced the appointment of Mike McTighe as the company’s new non-executive deputy chairman.

It comes as Robin Pinchbeck is stepping down from his position as independent Non-executive Director, a position he held for four years.

Francis Guegen, IGas chairman, said: “As we look to develop our assets, including our strategic shale assets which have become even more important in light of Brexit, the board is always looking to broaden its experience and industrial reach.

“Mike's appointment in this new role very much reflects that ambition as we look to take the business forward during this exciting but challenging phase for the industry and for IGas.

“I welcome Mike and the wealth of experience he brings to our board and look forward to working with him."

McTighe was previously a director of Ofcom, and has held senior executive roles for blue chip businesses such as Cable & Wireless, Philips, GE and Motorola.

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Wed, 03 Aug 2016 08:04:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/128941/igas-energy-hires-mike-mctighe-as-new-deputy-chairman-128941.html
<![CDATA[News - IGas Energy has buyer for US$165mln of debt ]]> https://www.proactiveinvestors.co.uk/companies/news/127847/igas-energy-has-buyer-for-us165mln-of-debt-127847.html IGas Energy Plc (LON: IGAS) revealed that an unnamed client has accepted an offer to  buy the gas firm's listed debt.

Pareto Securities, which has been working on behalf of the client, revealed it had accepted  the offer for the US$165mln senior callable bonds.

Pareto said the client had accepted all tenders to and including 75% of par which will be the purchase price  at which all the bonds are to be acquired, which is expected on July 12, 2016.

IGas also noted today the acquisition of senior bonds with a nominal value of US$38.42mln at 75 cents per bond on the on the Oslo Stock exchange.

In June IGas said it was actively seeking to strengthen its balance sheet. It also revealed it had begun talks with its leading bondholders with a view to extending the maturity of the debt, defer interest payments and waiver certain financial covenants.

These talks were launched on the basis that further financing would be coming into the business.

The firm today repeated that it was in active discussions with leading bondholders and it would provide an update ‘as appropriate’.

Shares in  London eased 5.08% to 14p each.

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Tue, 05 Jul 2016 11:14:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/127847/igas-energy-has-buyer-for-us165mln-of-debt-127847.html
<![CDATA[News - Investor seeks to acquire IGas Energy’s listed bonds ]]> https://www.proactiveinvestors.co.uk/companies/news/127411/investor-seeks-to-acquire-igas-energys-listed-bonds-127411.html Pareto Securities, working on behalf of a client, revealed it is seeking to acquire IGas Energy Plc’s (LON:IGAS) listed debt.

The investor, which was not named but was described as ‘not affiliated’ with IGas, wants to make an offer to holders of the group’s US$165mln senior callable bonds.

As such Pareto intends to carry out a reverse book-build process, which will determine a single offer price to bondholders. It is to opening the book today, and intends to close the process on July 1.

“Pareto together with the client will determine the purchase price and consequently the total amount of bonds to be purchased,” the broker said in a statement.

In Oslo, where they are listed, the IGas bonds were earlier today priced at 59 pence in the pound. The bonds carry a 10% coupon, and are due to mature in March 2018.

IGas Energy last week released a corporate update in which it, among other points, told investors that it was actively seeking to strengthen its balance sheet. It also revealed it had begun talks with its leading bondholders with a view to extending the maturity of the debt, defer interest payments and waiver certain financial covenants.

These talks were launched on the basis that further financing would be coming into the business.

IGas, in today’s statement, repeated that it was in active discussions with leading bondholders and it would provide an update ‘as appropriate’.

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Wed, 22 Jun 2016 16:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/127411/investor-seeks-to-acquire-igas-energys-listed-bonds-127411.html
<![CDATA[News - IGas Energy in talks with potential investors ]]> https://www.proactiveinvestors.co.uk/companies/news/127084/igas-energy-in-talks-with-potential-investors-127084.html IGas Energy Plc (LON:IGAS) has highlighted that it is in talks with a number of potential investors.

The UK shale gas frontrunner and conventional onshore operator said it continues to evaluate options for cash and earnings accretive transactions, including farm-outs and other portfolio management opportunities.

IGas also noted that it has also been in discussions with its leading bondholders with a view to extending the maturity of the debt, deferring certain interest payments and the waiver of some financial covenants.

The company’s efforts aim to establish a sustainable capital structure for the current oil price environment, as well as enabling it to capitalise on value accretive opportunities

Such opportunities include water injection programmes, accessing oil that’s currently ‘behind pipe’, and gas monetisation.

Infill drilling could be another option, which could help increase production by 700 barrels of oil equivalent net of decline by January 2018.

Currently, IGas expects to produce between 2,500 and 2,700 boepd in 2016. It highlighted that oil prices have now improved to around US$50 and it expects operating costs of around US$30 per barrel for the year.

IGas had £23.6mln of cash at the end of May.

In a stock market statement, IGas said: “The company is monitoring its bond covenants, in particular ratios based on cash and leverage, which continue to be impacted by the prevailing oil price and current currency volatility.

“The company will update the market in due course as discussions progress.”

IN DEPTH: Steady producer today, growth by shale gas tomorrow MORE: IGas Energy welcomes UK fracking breakthrough WATCH: IGas “very pleased” with North Yorkshire fracking decision

IGas also highlighted that it has one of the largest shale acreage positions in the UK, and has “very significant” carried work programmes - with a total value of US$255mln - due to take place across its portfolio.

Good progress is being made on IGas’s five year shale development plan, the company said, with two wells planned for the first half of 2017 - subject to planning and permitting.

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Tue, 14 Jun 2016 07:54:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/127084/igas-energy-in-talks-with-potential-investors-127084.html
<![CDATA[Media files - IGas chief “very pleased” with North Yorkshire fracking decision ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/5081/igas-chief-very-pleased-with-north-yorkshire-fracking-decision-5081.html Thu, 26 May 2016 14:44:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/5081/igas-chief-very-pleased-with-north-yorkshire-fracking-decision-5081.html <![CDATA[News - IGas Energy welcomes UK fracking breakthrough ]]> https://www.proactiveinvestors.co.uk/companies/news/126360/igas-energy-welcomes-uk-fracking-breakthrough-126360.html A stock market statement from IGas Energy Plc (LON:IGAS) - ahead of today’s AGM and after yesterday’s UK fracking breakthrough - has highlighted progress with the company’s five-year UK shale plan.

IGas shares gained a further 5.26% on Wednesday, and adding to the previous day’s gains is now up some 30% this week.

The company said it expects final determination of its planning application for the Springs Road project (part of PEDL 140), in the Bowland basin, during the third quarter of this year.

It also noted the submission of a planning application for the Tinker Lane project to Nottinghamshire County Council in May.

Meanwhile, it has now concluded the preliminary interpretation of data from a 3D seismic programme, and ecological surveys underway ahead of site selection ahead of applications for flow tests.

“Progress continues against our five year shale development plan and, subject to planning and permitting, we expect to spud two carried wells in the first half of 2017,” said chief executive Stephen Bowler.

FRACKING APPROVED: Third Energy gets greenlight in Yorkshire IN DEPTH: IGAS shale business and the UK fracking hullabaloo

It comes after Third Energy, a privately owned company, yesterday received planning approval for a fracking project on an existing well in North Yorkshire. It was the first planning approval for fracking in five years.

Bowler this morning added: “We were delighted that Third Energy were granted planning permission to hydraulically fracture their existing KM8 well and welcome the decision taken by North Yorkshire County Councillors in their careful consideration of the facts and the recognition that this established onshore industry can carry out its operations safely and environmentally responsibly. 

“There is a pressing need to deliver lower carbon energy that is home grown, provides important energy security for the future alongside economic benefits to the local communities as well as the country as a whole.”

Whilst the five-year shale plan represents an exciting future for IGas, in the group’s present day conventional oil and gas production operation remains important.

IGas told investors that production remains stable, with guidance for 2,500 to 2,700 barrels oil equivalent per day for the full year.

It added that gas monetisation projects are progressing, and that planning permission has been granted for the Bletchingley asset.  The company has also secured approval for two additional wells at the Singleton field.

The company also highlighted that its operating costs are expected to be US$30 per barrel of oil equivalent, and that it had some 405,000 barrels hedged to June 2017 at a floor price of US$50.25 per barrel (as of April 30 2016).

It estimates US$10mln of capital expenditure over the course of the year, and noted that at the end of April it had £22.5mln of cash.

City broker repeats 'buy' recommendation and highlights 'strong' position

Sam Wahab, analyst at Cantor Fitzgerald, in a note, said: “the company remains in a strong financial position, with production stable and within guidance.

“Encouragingly in our view, the company continues to identify projects to enhance production and utilise its stranded gas.

“Progress also continues with regards to the company’s five year shale development plan and, subject to planning and permitting, IGas expects to spud two carried wells in the first half of 2017.2

Repeating a ‘buy’ recommendation and a 41p price target (current price 20p), Wahab added:  “IGas benefits from strong combination of stable production and cashflow generation, a considerable portfolio of UK onshore conventional fields, as well as a fully funded high impact shale exploration and testing programme – one of the only few UK listed companies with this exposure.

“With strategic partners in INEOS, Total and GDF Suez providing key financial and technical input against a backdrop of potentially transformational resource upside, we see compelling value in IGas’ current valuation.”

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Wed, 25 May 2016 08:43:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/126360/igas-energy-welcomes-uk-fracking-breakthrough-126360.html
<![CDATA[News - IGas Energy jumps 25% as UK shale gets fracking boost ]]> https://www.proactiveinvestors.co.uk/companies/news/126306/igas-energy-jumps-25-as-uk-shale-gets-fracking-boost-126306.html IGas Energy Plc (LON:IGAS) shares rallied around 25% in Tuesday’s early deals as the UK shale gas sector received a shot in the arm with the approval of a planning application for a fracking programme in North Yorkshire.

It is the first time in over five years that a UK fracking project is able to go ahead, following the suspension of Cuadrilla’s operations near Blackpool which caused earth tremors.

As such it marks an important milestone in the anticipated scaling up in the UK shale gas sector, assuming the operational elements the project goes off without a hitch.

IGAS has interests in shale gas projects in Lancashire, Cheshire, North Wales and Nottinghamshire - so the breakthrough potentially marks something of a de-risking event for the AIM quoted share.

City stockbroker VSA Capital has said that fracking could potentially now take place in the UK before the end of 2016, so long as opponents do not delay operations by bringing a legal challenge against it.

“This is positive for all holders of shale gas acreage,” the broker said in a note.

It added: “Eyes will now turn to Cuadrilla’s appeal at Little Plumpton and Roseacre Wood, and IGAS’ application at Springs Road where decisions on both are expected over the summer.”

IGas Energy is one of very few investible plays on UK shale, and of those that are investible it is the most significant.

FRACKING APPROVED: Third Energy gets greenlight in Yorkshire IN DEPTH: IGAS shale business and the UK fracking hullabaloo

It has, pending confirmation of new licences, about one million acres in the UK that deemed to be prospective for shale. 

Whilst it has only done work on small portions of that it beleives it has already identified huge gas resources. Estimates put that resource at 80 trillion cubic feet of gas-initially-in-place (GIIP).

In early deals on AIM, IGas shares gained 3.75p, 24.59%, to change hands at 19p (they traded as high as 21p this morning).

Shares in Egdon Resources Plc (LON:EDR), which secured new shale interests in the licensing round last year, were up 1.87p or 21.74% to 10.50p.

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Tue, 24 May 2016 09:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/126306/igas-energy-jumps-25-as-uk-shale-gets-fracking-boost-126306.html
<![CDATA[News - Fracking project gets green light in North Yorkshire ]]> https://www.proactiveinvestors.co.uk/companies/news/126300/fracking-project-gets-green-light-in-north-yorkshire-126300.html Prospects for UK shale firms have received a shot in the arm with the approval of a planning application for a fracking programme in North Yorkshire.

North Yorkshire County Council (NYCC) has approved the application from Third Energy, a company backed by Barclays private equity, for an eight-week programme at an existing well site near Kirby Misperton, a village in the Ryedale area of the county.

It now has planning permission to frack the well, known as KM8.

This is the first time in over five years that a UK fracking project has been able to go ahead, following the suspension of Cuadrilla’s operations near Blackpool, which caused earth tremors.

As such it marks an important milestone in the anticipated scaling-up in the UK shale gas sector, assuming the operational part of the project goes off without a hitch.

Third Energy’s KM8 programme is intended to test whether a hybrid sandstone shale formation can flow gas in sufficient volumes and whether the gas can be produced commercially.

“First I would like to thank NYCC for making this positive determination. I know this not a decision that they have taken lightly, especially given the technical complexities and number of presentations made,” said Rasik Valand, Third Energy chief executive.

He added: “This approval is not a victory, but is a huge responsibility.”

“We will have to deliver on our commitment, made to the committee and to the people of Ryedale, to undertake this operation safely and without impacting on the local environment.”

“However, don’t expect to see any activities on site in the near future. We have conditions from both the planning authority and the Environment Agency to discharge.

"There are other consents and notifications required prior to receiving final consent from the Secretary of State. Then there is the normal commercial and project management work, such as the letting of contracts and ordering of long-lead items.”

Industry welcomes decision

United Kingdom Onshore Oil and Gas (UKOOG), the industry group representing Britain’s onshore operators, welcomed the planning approval and highlighted that NYCC had corroborated the recommendation given earlier by the planning official’s report.

Ken Cronin, UKOOG chief executive, said: “UKOOG welcomes the decision that has been taken today by NYCC, which helps to dispel many of the misleading claims that have been made about this application, as well as the process of hydraulic fracturing more generally.

“We look forward to Third Energy being able to conduct a test to see how much gas is under this area of North Yorkshire to power and heat homes and businesses.”

Dr Adam Marshall, acting director general of the British Chambers of Commerce, meanwhile, described the decision as a “much-needed victory for pragmatism”.

“Fracking has the potential to play a part in solving the UK’s energy crunch, and create new energy-related jobs in many areas,” Marshall said.

He added: “Businesses will want to see speedy development of this and other shale gas sites, together with maximum environmental and community consideration, not endless appeals.”

Greenpeace bemoans government’s ‘pro fracking bias’

The “bitterly disappointing” decision from NYCC had an air of inevitability given the government’s ‘pro fracking bias’; so says Daisy Sands, Greenpeace Head of Energy campaign.

“It is striking that the overwhelming number of speakers giving evidence at the two day hearing were against fracking and Ryedale Parish Council voted against fracking at its back door but North Yorks Council has overlooked this and the many, many concerns that were raised locally,” Sands said.

“But this isn’t over and people will continue to raise their very valid concerns and keep fighting against fracking because it will industrialise the beautiful Yorkshire countryside and contribute to climate change.”

Is a broader debate needed over UK shale and fracking?

Elsewhere, an academic noted that Third Energy’s project has lacked community support.

Michael Bradshaw, professor of global energy at Warwick Business School, said: “While Third Energy has got its planning permission, it is clear that it has failed to obtain a social licence from the local community.

“The sentiment of those living in Ryedale was overwhelmingly against shale gas development.

“Their understandable concerns were about the cumulative impact that widespread commercial shale development might have on the North Yorkshire landscape, but we are a long way away from that.

"The industry is in its very earliest stages of development and the Kirby Misperton site is not representative of the exploration and appraisal programme that must be followed to determine whether or not shale gas is commercially viable.”

Bradshaw highlighted that a programme of 20 to 30 exploration and appraisal wells would be needed across the UK’s Bowland basing before it can be determined whether a shale gas industry can be developed commercially.

He notes that an appeal is due for Cuadrilla’s proposals in Lancashire - which were recommended by planning officials but denied by Lancashire County Council - and that INEOS was also ‘waiting in the wings’.

The professor expects projects in Nottinghamshire to also come into focus - as AIM quoted IGas Energy Plc (LON:IGAS) advances towards making applications for planning permission.

"What we have seen, first in Lancashire, and now in North Yorkshire, is bound to be repeated elsewhere and with growing frequency,” he said.

Bradshaw says a much broader and open debate about the UK’s energy future is needed.

“Perhaps the imminent report from the Climate Change Committee about its views on shale gas development can spark such a debate," he concluded.

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Tue, 24 May 2016 08:29:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/126300/fracking-project-gets-green-light-in-north-yorkshire-126300.html
<![CDATA[News - UK shale firms await North Yorks fracking decision ]]> https://www.proactiveinvestors.co.uk/companies/news/126205/uk-shale-firms-await-north-yorks-fracking-decision-126205.html UK shale companies are awaiting the outcome of the latest tussle over planning approvals for a proposed fracking programme.

North Yorkshire County Council is expected to make its planning decision on Monday, after meetings began last week as part of the determination process.

If approved it will be the first fracking project to be greenlighted since Cuadrilla’s operations in Lancashire were suspended amid earthquake concerns. It could mark a major turning point for the nascent sector. It could potentially set new precedent, and ease some of the scrutiny against fracking projects.

Third Energy, a company backed by Barclays private equity, has applied to conduct an eight week programme including fracking near Kirby Misperton, a rural village in North Yorkshire (outside the national park boundaries).

It wants to frack an existing well, KM8, drilled in 2013, within a wellsite that has been there for more than 30 years.

A week ago Third Energy’s project was boosted with a recommendation from the council’s planning officer which concluded the application should be approved.

But, as those following the UK fracking story closely will know, getting the officer’s recommendation does not guarantee planning approval will be granted.

Over the other side of the Pennines Cuadrilla, similarly, received a recommendation from planning officers for its proposed fracking project, near Blackpool, before Lancashire County Council rejected the application.

“The planning officer’s positive recommendation comes after very detailed scrutiny of the application by the planning officer and statutory consultees and taking into account representations by members of the public and other groups,” said Rasik Valand, Third Energy chief executive.

“This work is reflected in the planning officer’s report together with the planning conditions proposed. 

“We believe that this thorough report will enable North Yorkshire County Council to reach a positive determination on our application.

“Third Energy has been drilling wells, producing gas and generating electricity safely and discreetly in North Yorkshire for over 20 years and we will continue to maintain the same responsible approach in the future.”

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Mon, 23 May 2016 09:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/126205/uk-shale-firms-await-north-yorks-fracking-decision-126205.html
<![CDATA[News - Fracking project recommended for approval in Yorkshire ]]> https://www.proactiveinvestors.co.uk/companies/news/125900/fracking-project-recommended-for-approval-in-yorkshire-125900.html Britain’s nascent shale gas industry has taken another half step forward as planning officials in North Yorkshire have recommended a planning application for approval.

Third Energy, a UK oil firm majority owned by a Barclays private equity fund, has applied for permission to conduct a fracking programme on an existing well at its Kirby Misperton field, a mature operation in Ryedale, in the Vale of Pickering, which has a long history of conventional production.

As those following the UK fracking story closely will know, getting the officer’s recommendation does not guarantee planning approval will be granted.

Cuadrilla, similarly, reecived the green light from planning officers for its proposed fracking project in Lancashire, near Blackpool, but the county council rejected the application. The privately owned shale gas firm appealed that decision last year and the outcome is still awaited.

Rasik Valand, Third Energy chief executive, highlighted that the company has been producing gas “safely and discreetly” from the site for over 20 years, and it expects to maintain the same standards in the future.

“We are pleased that the planning officer has recommended that North Yorkshire County Council approve our application.”

“Within our application, and throughout North Yorkshire County Council’s thorough assessment of it, including various stages of consultation, and through all the additional information provided, we have addressed the wide range of questions, concerns and comments raised by NYCC, statutory consultees and others.”  

“This work is reflected in the planning officer’s report together with the planning conditions proposed.  We believe that this thorough report will enable North Yorkshire County Council to reach a positive determination on our application.”

Ken Cronin, chief executive of industry group United Kingdom Onshore Oil and Gas (UKOOG), in a statement said: “It is good news that the North Yorkshire County Council planning officer is recommending that the planning application at Kirby Misperton is approved, reflecting the hard work NYCC officers and Third Energy have done to address concerns that have been raised following extensive consultations.

“We will look forward to the council's decision on that application, in due course.

“This recommendation should not be seen by anyone as a surprise, considering the well at Kirby Misperton has already been approved by the council, Health and Safety Executive and an independent well examiner and subsequently drilled.

“The further application for the hydraulic fractures has also received approval by the Environment Agency with the issue of relevant Permits.”

Environmental groups have protested against the proposed project, as they have other fracking proposals.

Friends of the Earth issued a statement following the planner’s recommendation warning Third Energy not to ‘pop’ champagne corks yet.

Simon Bowens, a Friends of the Earth’s Yorkshire campaigner, said: “North Yorkshire Councillors have been presented with clear evidence that Third Energy's application could harm local wildlife, local business, people's health and the environment - including from Ryedale District Council, Flamingo Land and the Wildlife Trust.

"The council must now listen to the thousands of residents who have objected to fracking, and the strong evidence put before them, and reject Third Energy's proposal to frack.”

Both Third Energy and Cuadrilla are privately owned businesses.

IGas Energy Plc (LON:IGAS) is one of very few investible plays on UK shale, and of those that are investible it is the most significant.

It has, pending confirmation of new licences, about one million acres in the UK that deemed to be prospective for shale. 

Whilst it has only done work on small portions of that it beleives it has already identified huge gas resources. Estimates put that resource at 80 trillion cubic feet of gas-initially-in-place (GIIP).

READ IN DEPTH: Market currently gives IGas very little credit for shale

If IGas was able to easily plan, permit, drill and frack shale wells in the UK, the group's valuation would be unrecognisable from what it is today.

Such is the uncertainty over timelines, for local planing and permitting particularly, IGas is now working through what it is describing as a five year strategy for shale. At present, this mostly involves planning applications, appeals, and a lot of waiting.

Forward steps for any of UK shale’s early movers like Third Energy or Cuadrilla may prove influential for those monitoring IGas’s prospects.

The government in Westminster has repeatedly given support to UK shale, but, this has yet to translate to meaningful or measurable progress at local level.

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Fri, 13 May 2016 08:02:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/125900/fracking-project-recommended-for-approval-in-yorkshire-125900.html
<![CDATA[Media files - IGas Energy Plc is “well placed” in oil market, says chief ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/4839/igas-energy-plc-is-well-placed-in-oil-market-says-chief-4839.html Thu, 31 Mar 2016 14:51:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/4839/igas-energy-plc-is-well-placed-in-oil-market-says-chief-4839.html <![CDATA[News - IGas Energy PLC cuts production costs to $24 per barrel ]]> https://www.proactiveinvestors.co.uk/companies/news/123732/igas-energy-plc-cuts-production-costs-to-24-per-barrel-123732.html IGas Energy Plc (LON:IGAS) revealed it has been successful in cutting back production costs to levels more manageable in the current oil price environment.

Operating costs for the financial year, ended December 31, reduced to $24.6 per barrel of oil equivalent, down from $34.6 per boe in the prior year.

"In the period, we have continued to move the business forward significantly against a very difficult oil price environment, importantly reducing operating costs by 25% and strengthening our balance sheet through the farm-out to INEOS,” said Stephen Bowler, IGas chief executive.

He added: “In this protracted period of low oil prices, our focus remains on balance sheet strength and preserving cash whilst continuing to deliver value adding activity."

The big numbers - much like everyone in the sector - show the extent of financial damage caused by the continued oil price weakness.

IGas, a conventional oil and gas producer with unconventional upside, told investors that revenue fell to £25.1mln in 2015, down from 58.2mln in the year before.

Earnings (EBITDA) were reported at £18.3mln, down from £21,6mln.  

Having reported a profit of £5.2 in 2014, the group made a loss of £44.8mln last year. Much of the losses come from impairments and write-offs.

IGas wrote £10mln off exploration and evaluation assets, while some £48.1mln of impairments to production assets.

At the end of December, IGas had £28.6mln of cash and equivalents. Net assets were valued at £98.8mln. Debt had reduced to £73.3mln at year end, compared to £86.4mln in 2014.

Operationally, the conventional oil and gas business remains reasonably stable. Production averaged 2,570 boepd for the year, down from 2,737 boepd in 2014. And guidance for 2016 is pitched at between 2,500 and 2,700 boepd.

IGas highlighted that for 2016 it has some 390,000 barrels of oil hedged at an average floor price of $62 per barrel, and the mark-to-market value of the arrangement was £6.6mln.

The group’s strategic emphasis remains upon unconventional assets, namely its increasingly advanced UK shale interests.

In May, the group’s shale business was enhanced significantly with the completion of its partnership deal with INEOS - which paid £30mln upfront, and committed to a $255mln work programme which will advance IGas projects.

Later in the year the company was boosted further when it secured additional shale acreage via the UK government’s onshore licensing round.

IGas continues to pursue a five-year development plan for its shale business.

As part of this campaign it completed a new 3D seismic programme in the North West of England in November, and data interpretation is expected to be ready by the third quarter of this year.

Meanwhile, the timeline for company’s projects are largely influenced by the UK planning and permitting processes.

More information was recently requested for the group’s proposed Springs Road project, further consultation will follow and determination is expected in the third quarter.

Meanwhile, a new planning application is expected to be submitted for the Tinker Lane Site in the second quarter.

“We continue to make progress in line with our five year development plan for our shale assets, including the submission of planning applications in North Nottinghamshire and the interpretation and processing of the 3D seismic data in the North West,” Bowler said. 

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Wed, 16 Mar 2016 08:08:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/123732/igas-energy-plc-cuts-production-costs-to-24-per-barrel-123732.html
<![CDATA[News - IGas advances as it increases UK acreage by 25% ]]> https://www.proactiveinvestors.co.uk/companies/news/120606/igas-advances-as-it-increases-uk-acreage-by-25  

Shares in IGas Energy (LON:IGAS) advanced on Thursday after it confirmed it has been awarded 17 new licences as part of the UK’s 14th onshore licensing round.

Having been offered seven licence blocks earlier in the first tranche earlier this year, the company has now been offered ten more.

It increases IGas’s acreage position by 25%, adding 162,000 acres, to a Total of 876,000 acres under licence.

"We are delighted to have been formally offered these new blocks by the OGA, which significantly increases our acreage,” said chief executive Stephen Bowler.

“We are also pleased to be strengthening the relationships with our existing partners Total, Egdon and GDF in these strategic areas.”

The new acreage is located in the Boland basin, in North West of England, as well as the Gainsborough Trough, in the East Midlands. It has also secured acreage in the Weald basin, in South East of England.

It is partnered with Total and Egdon Resources (LON:EDR) in the East Midlands, and with GDF Suez in the North West.

Acreage in the South East will be wholly owned. The southern area is considered to have conventional oil and gas potential, rather than shale, and are located adjacent to the company’s Singleton and Bletchingley fields.

Bowler added: “We already operate over 100 sites across the country and will continue to ensure that, in all existing and new areas, we engage with the local communities.

“This is a critical time for the future of Britain's energy mix as gas, of which 50% of our consumption is currently imported, is central to our energy security as we transition to a lower carbon environment."

IGas shares gained 0.88p, 4.29%, to trade at 21.25p each.  

 

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Thu, 17 Dec 2015 15:05:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/120606/igas-advances-as-it-increases-uk-acreage-by-25
<![CDATA[News - UK shale licensing envisages 98 new wells ]]> https://www.proactiveinvestors.co.uk/companies/news/120596/uk-shale-licensing-envisages-98-new-wells-120596.html --UPDATE, ADDS MORE DETAILS-

Britain’s Oil & Gas Authority (OGA) has announced that a Total of 159 new shale licence blocks have been issued to companies.

The offers, the government’s 14th Licence Round, see new areas of the country potentiall opened up for shale gas, though other conventional oil and gas projects also feature. 

The licence terms foresee up to 98 new wells, of which at least nine would be fracked.

It marks the end of this licensing process and follows an early tranche of offers in August, when 27 licence blocks were offered.

The second and final tranche comes after additional environmental assessments. Of the 159 blocks, 75 are subject to prohibitions banning some or all activities in certain areas of the block.

IGas (LON:IGAS) has been offered a Total of 17 new licence blocks as operator, including seven in partnership with Total and four alongside GDF.

French major Total is partnered in seven of the blocks offered to IGas.

Alkane Energy (LON:ALK) offered six blocks, with two firm commitment wells.

Angus Energy, which plans to list in London, has been offered five blocks alongside partners UK Oil & Gas Investments (LON:UKOG) and Solo Oil (LON:SOLO).

As operator Egdon Resources (LON:EDR) has been offered six blocks with one firm well commitment.

Egdon is also a partner in 12 other blocks

Europa Oil & Gas (LON:EOG) has been offered two licence blocks as operator, with no firm well commitment, and it is also a partner in three others.

Notably, among those Egdon and Europa are partnered in two blocks by operator Third Energy, which is owned by Barclays’ private equity investment business.

Upland Resources (LON:UPL), a standard listing on the London Stock Exchange backed by former Cove Energy director Steven Staley, is a partner (alongside Europa) in a block offered to Ineos.

INEOS has been offered a Total of 37 blocks, it is committed to drilling a number of wells and is would also be required to frack as many as nine wells in order retain the assets.

Privately owned Cuadrilla, which currently has the most advanced UK shale projects, has been offered eight new licences as operator.

GDF Suez has been offered six blocks as operator, and is a partner in a number of others.

Ithaca Energy (LON:IAE), meanwhile, is partnered with operator Perenco in two blocks alongside Maersk Oil North Sea UK.

Infrastrata (LON:INFA) was offered two licences.

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Thu, 17 Dec 2015 12:53:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/120596/uk-shale-licensing-envisages-98-new-wells-120596.html
<![CDATA[News - The government to have final say on Cuadrilla fracking appeal ]]> https://www.proactiveinvestors.co.uk/companies/news/119782/the-government-to-have-final-say-on-cuadrilla-fracking-appeal-119782.html The final decision on whether to allow fracking in Lancashire will be made directly by the government, it was confirmed today.

Shale gas explorer Cuadrilla, part-owned by Centrica (LON:CNA), had an application initially turned down in June on traffic grounds, even though the council’s planning officer concluded it had met all environmental and planning guidelines.

A government overrule would be a huge boost for Cuadrilla, which is appealing Lancashire County Council's rejection.

Most planning appeals are decided by a planning inspector, but Secretary of State for Communities and Local Government Greg Clark is using the ‘recovery’ procedure, giving him the right to decide the outcome.

The appeal will be heard by the planning inspector, as is usual, but the final decision will be Clark’s, who reportedly told Lancashire County Council of his decision on Thursday.

Cuadrilla has changed its transport plans to avoid local villages and added on Friday that it “looks forward” to presenting its new plans to Clark.

“We note the decision of the secretary of state for communities and local government to decide the appeals after the Planning Inspector has conducted the Public Inquiry and produced a report and recommendations,” Cuadrilla said.

“This is part of the long established planning process and we look forward to presenting our case at the Public Inquiry commencing in February.”

Shares in IGas (LON:IGAS), another shale gas group with extensive interests in Lancashire through the Bowland Shale, rose 6% to 18.2p, while Centrica was flat at 221p.

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Fri, 27 Nov 2015 10:35:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/119782/the-government-to-have-final-say-on-cuadrilla-fracking-appeal-119782.html
<![CDATA[News - IGas Energy's Bowler sees exciting 2016 for UK shale ]]> https://www.proactiveinvestors.co.uk/companies/news/119678/igas-energy-s-bowler-sees-exciting-2016-for-uk-shale-119678.html --UPDATE, ADDS COMMENTS FROM IGAS CEO AND CFO--

IGas Energy (LON:IGAS) told investors it is in the process of identifying a number of suitable sites for shale gas appraisal and fracking.

The aim will be to carry out flow testing in order to assess the potential commerciality of UK shale.

Chief executive Stephen Bowler, speaking with Proactive Investors, highlighted what is expected to be a potentially significant start to 2016 for the UK’s nascent shale sector.

A number of key projects are due planning decisions, including IGas’s own proposal for the Springs Road site, in North Nottinghamshire, where it wants to drill two exploration wells (which won’t be fracked as part of the programme).

Also in the first quarter privately-owned Third Energy is expected to hear a decision on its application to carry out a fracking programme in North Yorkshire and the planning enquiry into Cuadrilla projects near Blackpool and Preston will begin.

And, before all that, it is anticipated that the second tranche of new shale licences awards will be made by the government this side of New Year’s Eve.

“It is a very exciting time for the industry as we move into Q1 2016,” Bowler said.

He added: “And it is really topical at the moment, given the government statements around the coal power industry and plans for power stations to come offline by 2025.

“We’ll need to get our UK energy from somewhere, and I very much hope UK shale will be part of that.”

Operationally, Bowler says IGas has in the first six months of the financial year “very much” delivered against its plans for the UK shale portfolio.

As for today’s figures, the highlight according to recently appointed chief financial officer Julian Tedder is the group’s financial flexibility.

“We’ve got significant cash balances and we have about US$20mln of our own bonds – so we’ve got a good footing there,” Tedder said.

“I think, in this ‘lower for longer’ [oil price] environment, we’re going to need to and are looking at our costs again. And we believe we’ve got a range of options to pursue including buying back more bonds, investing in our operations.

“So, the message is one of financial flexibility really.”

The company ended the period with £34.5mln of cash and equivalents and its net debt had narrowed to £64mln from £80.8mln.

Away from the shale business the company continues to generate revenue from conventional oil and gas production.

In the six month period production amounted to 2,540 barrels oil equivalent per day, compared to 2,766 boepd in the same period of 2014. The company’s cost cutting efforts saw cost of production reduce to US$31 per barrel oil equivalent, from US$38 per barrel last year.

The impact of weaker oil prices is still apparent in the financial results, however, with revenue down to £17.6mln compared a 2014 comparative of £34.5mln.

Earnings (adjusted EBITDA) reduced to £7.4mln, versus £14.8mln, and the company made an impairment of £19.5mln. Loss after tax amounted to £19.3mln.

Looking at the current period, the company pointed out that it has hedged 555,000 barrels of production, with a floor price of US$62 per barrel, for the fifteen month period between October 2015 to December 2016.

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Wed, 25 Nov 2015 07:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/119678/igas-energy-s-bowler-sees-exciting-2016-for-uk-shale-119678.html
<![CDATA[News - IGas advances planning application for shale project in Nottinghamshire ]]> https://www.proactiveinvestors.co.uk/companies/news/116882/igas-advances-planning-application-for-shale-project-in-nottinghamshire-116882.html IGas Energy (LON:IGAS) has revealed it is advancing planning applications for a shale gas project in Nottinghamshire.

The company, in a statement, said a planning application for the Springs Road site, in the northern part of the county, has now been validated by Nottinghamshire County Council and it has met all the council’s requirements.

It marks the start of a public consultation process, ahead of a planning officer’s recommendation is made to the planning committee.

IGas wants to drill two exploration wells to evaluate geology and begin the process of assessing the area’s potential for shale gas recovery.

“The drilling of the wells at Springs Road would be an important step in helping us to understand the shale gas potential in North Nottinghamshire and more widely in the East Midlands and South Yorkshire,” said chief executive Stephen Bowler.

He added: “As part of our commitment as a responsible operator, we have listened to the local community and have routed traffic north of the site away from the village of Misson.

“I would encourage local residents to come and talk to us at our events which we will be holding over the coming weeks so they can be reassured that this project will be carried out safely and environmentally sensitively.”

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Fri, 30 Oct 2015 12:01:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/116882/igas-advances-planning-application-for-shale-project-in-nottinghamshire-116882.html
<![CDATA[News - IGas Energy at forefront of UK shale, says Canaccord ]]> https://www.proactiveinvestors.co.uk/companies/news/111192/igas-energy-at-forefront-of-uk-shale-says-canaccord-111192.html IGas Energy (LON:IGAS) is at the forefront of the UK shale gas play, according to broker Canaccord Genuity, which it says has been boosted by the government.

Canaccord has a ‘speculative buy’ rating for IGas, and with a 55p price target the broker suggests some 175% upside to the current price of 20p.

“The renewed and clear government support for onshore shale gas exploration and its desire to see planning applications conducted within the defined timetable, provides a fillip for UK shale gas exploration after delays earlier this year,” said analyst Charlie Sharp.

“For IGas, its extensive licence interests in all the main shale 'hotspots', its diverse set of much-larger partners, together with up to $285m carries, puts it at the forefront of the UK shale gas play.”

Clarification on the timetables for local authorities planning and permitting processes came in August.

The central government intends to take control of the process should local councils take longer than 16 weeks to either grant or deny fracking proposals, it was confirmed. Amber Rudd, the energy secretary, at the time said: “To ensure we get this industry up and running we can’t have a planning system that sees applications dragged out for months, or even years on end.”

IGas is partnered in its shale projects alongside major international companies INEOS, EDF and Total.

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Mon, 28 Sep 2015 12:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/111192/igas-energy-at-forefront-of-uk-shale-says-canaccord-111192.html
<![CDATA[News - IGas Energy hires new CFO ]]> https://www.proactiveinvestors.co.uk/companies/news/110289/igas-energy-hires-new-cfo-110289.html IGas Energy (LON:IGAS) has appointed Julian Tedder as its new chief financial officer.

Tedder, who has held senior management experience at Tullow Oil and Centrica, will join the company on September 28.

"We are delighted that Julian will be joining the board,” said Francis Gugen, IGas’s chairman.

“His wealth of experience in the sector, most recently at Tullow Oil where he was part of the team that grew the business from being an explorer to a significant international oil and gas company operating with multiple partners, will complement IGas' existing leadership very well.

“We all look forward to him being part of the IGas leadership during the next phase of the company's growth."

Separately, IGas released a statement ahead of today’s AGM in which Gugen highlights that the company continued to make progress in spite of ongoing oil price volatility.

Much of the attention will no doubt be on the group’s UK shale gas plans.

On this matter, Gugen said: “We are progressing our five year shale development plan, which we set out at the full year results, in conjunction with our partners. 

“In the near term, we are moving ahead with our planning application for two wells at the Springs Road site in the East Midlands.  Across the Pennines, in the North West, we are undertaking a 3D seismic survey that will give us essential data to further inform near term site selection.”

Gugen also ‘welcomed’ clarity provided by the UK government regarding the timetable for planning applications and that the authorities see that shale development should be treated ‘as a national priority’.

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Wed, 26 Aug 2015 08:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/110289/igas-energy-hires-new-cfo-110289.html
<![CDATA[News - IGas in the spotlight after busy summer for UK frackers ]]> https://www.proactiveinvestors.co.uk/companies/news/110253/igas-in-the-spotlight-after-busy-summer-for-uk-frackers-110253.html IGas Energy (LON:IGAS), a small London listed company with a large exposure to onshore UK shale reserves, has had a busy time of it recently.

Earlier this month (August 13) its shares rose 7.5% amid government plans that could fast-track planning decisions for shale gas and fracking projects.

New government measures, effective from August 14, give local councils up to 16 weeks either to grant or deny fracking permissions before Westminster steps in.

Chief executive Stephen Bowler gave many interviews saying IGas warmly welcomed the initiative and that the company would continue to ensure that any risks or environmental impacts are minimised.

More recently IGas was among the first oil and gas groups to be offered new acreage in Britain as part of the government 28th onshore licensing round.

The Oil & Gas Authority, the UK’s newly created regulator, revealed that 27 new licence blocks had been offered to companies in the initial tranche of the round. Seven of those blocks have been offered to IGas.

Precise details of the licence blocks have yet to be disclosed or analysed and it is not known how much of the acreage will involve shale gas.

But Bowler said: “We are delighted with these new licence offers which further increase our oil and gas operations onshore and extends our acreage position in the strategically important Gainsborough Trough”.

The Gainsborough Trough is a known as a shale hotspot in the North of England.

IGas has been champing at the bit to get on with the exploitation of its shale assets in the North and East Midlands, particularly since May, when it announced  it had completed its farm-out to chemicals giant INEOS, a deal that puts real financial fire-power behind its existing shale gas acreage.

The AIM-quoted oil producer agreed the deal in March, which will see INEOS assume operatorship of production exploration and development licences PEDLs 133, 145 and 193 and EXL 273.

Under the terms of the transaction, IGas received £30mln in cash and a funded work programme of up to £138mln gross, with IGas’s share of these costs, reckoned to be about £65mln, to be funded fully by INEOS.

In the North West, INEOS will acquire a 50% per cent interest in IGas’s PEDL, 147, 184, 189, and 190 licences and a 60% interest in PEDL 145, 193 and EXL 273 (collectively known as the Bowland Licences).

Once commercial production starts from the Bowland Basin licences, IGas would pay back its net share of the carry out of 50% of its net free cash-flow.

In the East Midlands, INEOS has the option to acquire 20% in PEDL 012 and 200 and in Scotland INEOS will acquire IGas’s entire working interest in the acreage held under PEDL133 in the Midland Basin and assume operatorship.

INEOS is keen to advance the UK’s shale gas industry, believing an indigenous shale gas industry could transform UK manufacturing and lower feedstock costs for its Grangemouth petrochemical plant.

Partnering with IGas makes sense because IGas is one of the few publicly quoted groups at the forefront of the UK’s fledgling shale industry, and for IGas the tie-up adds further financial firepower to its shale portfolio.

The transaction means the shale gas wanna-be is now in partnership with industry heavyweights Total, GDF Suez and INEOS in the UK with a gross carried work programme of US$285mln.

It will give IGas a significant, funded schedule going forward, including 15 wells, flow tests and gas handling stations from its acreage covering 300 sq km and estimated by the company to hold 185 trillion cubic feet of gas.

In the meantime, in its most recently published guidance, in May, IGas said in the year to March 2015 the company produced 2,737 barrels of oil equivalent a day (boepd) - virtually all conventional oil - from its fields in the UK.

It expects to maintain output at 2,750 boepd for the next 12 months.

House broker Jefferies believes that IGas produced at US$48 a barrel including general and administration costs (G&A) and that capital expenditure was £13mln.

However, in the current poor oil price climate IGas has been cutting costs.

These involve head-count reductions of more than 25% including the closure of the former Dart office in Stirling, Scotland.(Dart was a company taken over by IGas).

At the end of March the company had cash of £19mln and net debt of £90.9mln. This has since been bolstered by the £30mln in cash from the INEOS farm-out.

The company expects to reduce costs per barrel to under US$40, and according to Jefferies, IGas has hedged 1mln barrels of its expected financial year 2016 output at an average of US$67 a barrel.

In attempting a valuation, which it last did after the May company update, Jefferies arrives at a core value of 18p a share. This includes revenues of £19.3mln from production and a sum for its12.6 mln barrels of proven and probable (2P) conventional oil reserves.

As for the shale gas question Jefferies bases its upside to a target price of 41p above the core valuation, on a 50% risking of the US$1079 per acre INEOS farm-in valuation.

The share price was 25.25p recently, but the valuation was made in May and the company has an annual general meeting (AGM) on Wednesday and we should glean some new information particularly about production, which should in turn lead to a Jefferies update on value.

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Tue, 25 Aug 2015 10:19:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/110253/igas-in-the-spotlight-after-busy-summer-for-uk-frackers-110253.html