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IGas shares advance on huge UK shale gas estimates
By Jamie Ashcroft June 03 2013, 12:00pm Estimates so far suggest the amount of shale gas in the ground would equate to 100 years of the UK’s gas needs.Estimates so far suggest the amount of shale gas in the ground would equate to 100 years of the UK’s gas needs.

IGas Energy (LON:IGAS) shares advanced on Monday as a study further underlined the group’s significant position in Britain’s nascent oil shale industry.

The AIM quoted firm revealed that its licences in north-west of England could contain as much 170 trillion cubic feet of gas.

Chief executive Andrew Austin says the findings support the view that IGas has very significant shale resources that could transform the company and materially benefit the local communities.


The study, which analysed reservoir characteristics and the thickness of the shale over a 330 kilometre area, also provided an estimate of the gas initially in place.

The ‘low’ estimate suggests some 15.1 trillion cubic feet (tcf) of gas in place, with a ‘most likely’ estimate 102 tcf. The ‘high’ estimate provides a figure of 170.3 tcf.

On AIM, IGas shares initially advanced over 15% in opening deals, and approaching midday they were changing hands at 103p, up 10.75%.

IGas is the only London listed firm with material interests in UK shale, and is just one of two companies to have confirmed a shale discovery via a well; the other being Lord Brown’s privately backed Cuadrilla, which has successfully drilled and tested shale gas near Blackpool.

Along with Cuadrilla, and its assessment of its assets, around 300 tcf of gas has now been outlined in North West England.

This means that estimates of select areas so far suggest the amount of shale gas in the ground would equate to 100 years of the UK’s gas needs.

Of course, it can't all be recovered economically - typically shale operations have recovery factors between 10 and 30%, though each project is different.

Nevertheless, these are very significant numbers, both for the UK and for the two relatively small companies operating the projects.

IGas has already talked about bringing in a partner to help it pursue the potentially huge opportunity, and high calibre names like Exxon have speculated among possibly suitors in the past.

But first, before IGas does any deal, it will launch a drill programme later this year. Initially, two wells are planned to follow up the shale discovery in the Ince Marshes well in early 2012.

According to IGas, the upcoming drill programme will further refine the shale gas resource estimates and will give the company more understanding of the basin.

http://www.proactiveinvestors.co.uk/companies/news/57585/igas-shares-advance-on-huge-uk-shale-gas-estimates-57585.html