IGas (LON:IGAS) told investors it is preparing to submit planning applications for several well sites.
"Over the next twelve months we anticipate acquiring further seismic data, securing new sites and submitting several planning applications for exploration wells and flow tests,” chief executive Stephen Bowler said in today’s results statement.
“We will also drill further exploration/appraisal wells including at our site in the East Midlands and anticipate this will start in the first half of 2016.”
Today’s statement comes as shale gas peer Cuadrilla awaits a decision for its application for what could be the first significant fracking programme in the UK.
Lancashire county council is due to give a verdict on one of two applications on Monday, after an inconclusive committee vote earlier this week. It was confirmed last night that the other application was refused.
The controversial fracking process, which is necessary to unlock gas from shale rocks, is legal in the UK though companies have to secure planning approval from the relevant local authorities.
IGas is among the early movers in Britain’s nascent shale gas sector; it has a significant acreage position across the North West and the Midlands.
Significantly, it has key partnerships with major industry players in the UK such as INEOS, GDF and Total. These partnership agreements mean IGas is funded for a five-year programme, which is currently being finalised.
IGas has already confirmed the presence of gas bearing shale and the next stage is to examine how productive and economic these discoveries could be.
This will involve drilling more wells, fracking and production testing. Such operations are critical in demonstrating the future development potential of the shale resources, the company said.
The company added that the timing of operations ultimately depend on the planning and permitting process, but it currently anticipates carrying out two flow tests on wells in late 2016 or early 2017.
Drilling operation, before then, are expected to get underway in the early part of next year.
IGas also has producing assets, from conventional reservoirs and coal bed methane.
Today’s financial results revealed a drop in revenues to £58.2mln, down from £75.9mln, due largely to the fall in crude prices.
Production in the year totalled 999,003 barrels oil equivalent, down from 1.01mln barrels in the prior year.
Earnings reduced to £21.6mln, from £34.2mln, and the company reported a £8.6mln underlying operating profit.
IGas made a £18.5mln pre-tax loss, versus a £2.3mln profit last year.
At the end of March IGas had £19mln of cash, though the coffers were subsequently boosted in May through the farm-out deal with INEOS which delivered £30mln.
At May 31, the company had a balance of £46.4mln.
Bowler, who recently took the reins from Andrew Austin, said IGas was now well placed to deliver its strategy thanks to its cash balance and up to US$285mln of project funding commitments from its major partners.