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Trapoil eyeing more shale gas stakes

Last updated: 07:09 22 Jan 2014 GMT, First published: 08:09 22 Jan 2014 GMT

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North Sea oil firm Trapoil (LON:TRAP) is looking at more opportunities to deliver value for shareholders, pointing to the potential for another unconventional oil play in the portfolio.

Last month, the company received more than 4mln IGas Energy (LON:IGAS) shares from Caithness Oil in exchange for Knockinnon, Lybster and other assets.

IGas, which acquired Caithness Oil in December, holds shale gas licences onshore UK. It has attracted plenty of attention of late, not to mention from French major Total, which is farming into two licences in the East Midlands.

Its share price has already risen 44% this year, meaning Trapoil’s shareholding is worth just north of £6mln.

Trapoil also revealed that the Athena oilfield, in which it has a 15% interest, is currently producing at a gross production rate of around 7,000 barrels of oil per day.

The P4 well has been shut in to monitor pressures and remedial action is being sought with the operator and other partners, with work expected to be carried out later this year.

At this stage, the rate of depletion cannot be reliably predicted, the company said, but it will become more evident as the water cut rises during the year.

The company finished 2013 with about £16mln in cash, meaning it is well funded for the near future.

It plans to spend £2mln on its licence interests, while keeping costs to a minimum.

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