Wales is set for its first oil drilling in decades if Sonorex Oil & Gas Limited can raise £2.3mln.
Sonorex has two shoreline licences situated between Newport and the Severn Bridge on the Welsh side of the Bristol Channel.
Crucially, all planning permissions are in place and the project now just needs funding to begin drilling.
David Barker is the founder of Sonorex and the driving force behind the project.
“There is a perception that Wales consists of old rocks that are too deeply buried and too cooked,” he says.
Careful analysis of the available data by Sonorex, its consultants and the British Geological Survey has convinced him, however, this is not the case.
Barker and partner John Elsden believe there are as much as 32mln barrels of oil, of which 19mln might be recoverable.
That would amount to income of £629mln over a 30-year production life, says Elsden.
Numbers stack up
Even if drilling finds gas, the numbers stack up in the same way, say the duo.
There are local chemical and steel plants and a nearby power station that runs on gas.
If oil is found, it will be taken by tanker to the refinery at Milford Haven.
“We had to piece the jigsaw together to discover whether the area was prospective in the first place and whether it would be worth taking forward.
“We've gone through all the stages of site and regional geology studies, seismic data, gravity and magnetic data.
“Now we need to find out whether the oil is actually there.”
Roadshows to investors have just started, says Elsden, to raise the money to fund the exploration.
A help will be Sonorex’s EIS status - which means gains are tax-free and losses offsettable.
Target depth is 4,000 feet, which means it is not a very deep well, says Elsden, who adds it should be reasonably straightforward to complete as it is onshore and a conventional, vertical hole.
Drilling, though, can only take place between July and December due to bird breeding seasons in the nearby wetlands, but once spudding begins, a result might come as quickly as five weeks.
“Our view is that by September of next year, we will know exactly where we stand.
“That’s not a long timeframe for investors.”
Sonorex will likely be one of the last companies to drill in Wales, at least for the foreseeable future, as permitting authority recently passed to the Welsh Assembly, which has said it won’t issue any more licences.
“The company is also applying for a permit to drill on its second licence,” adds Elsden.
“If [the first is] successful, there is a compelling reason to drill the other licence.”