If Darwin is referring to the Cuadrilla appeal, I don't think he's premature at all. The Kirby Misperton example makes the Lancs Council look even worse than they had before. Before the decision, the Telegraph wrote, "Fracking in Lancashire is likely to get the go-ahead at appeal even if the local council rejects it, legal advice issued to councillors suggests." The federal planning inspector is all but certain to recommend the overturning of the decision on at least one of the well sites based on planning law/regulations and that inspector's recommendation is only made more likely by the Yorkshire decision. I spoke with someone in the industry who said that the Secretary is certain to overturn the decision regardless of the recommendation from the inspector. It is hard to see how this will not turn into a green light for Cuadrilla.
Igas was up 25% on the news while Lucas was up 2.7%. That makes little sense at all to me. At some point a large investor will recognize that arbitrage opportunity, especially because Cuadrilla has an almost guaranteed approval coming in a couple months while IGas's situation is not as easy to handicap with its Springs Road application.
There will be legal challenges to any approvals, but I think that without an injunction work can proceed while the challenge is made. If the challenger tries for an injunction the economic consequences could be substantial because if the challenge fails that party would be responsible for all lost business. That could add up to millions, if not tens of millions, of GBP.
AJL Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
