igas chief tops up his holding

IGas chief tops up his holding

By Ian Lyall

January 16 2014, 7:43am
IGas is one of the UK's leading onshore oil and gas firms.
IGas is one of the UK's leading onshore oil and gas firms.


IGas (LON:IGAS) boss Andrew Austin has shown his confidence in the oil and gas firm at the forefront of Britain’s nascent shale revolution.

The chief executive has acquired 300,000 shares in the business he runs at 135.38p each. To do so he agreed a loan facility using 7.5mln shares he already owns as security.

The purchase takes Austin’s interested to 5.41% of the company.

The share purchase comes in the week the group was involved in farm-out of shale assets in Lincolnshire that brought in almost US$50mln of new investment from France’s Total.

The French giant’s move came as Prime Minister David Cameron said the coalition is “going all out for shale”.

The excitement has prompted a 150% jump in the share price of Egdon Resources (LON:EDR) and a 24% spike in the value of IGas, two of four companies that are part of the Total consortium.

The others are ASX listed Dart Energy (ASX:DTE and privately-owned eCorp International.

Under the farm-out agreement, Total will take a 40% stake in production exploration and development licences 139 and 140, although IGas will be operator.

Covering 240 square kilometres, the licences are located in the Gainsborough Trough in Lincolnshire and butt up to producing conventional fields.

The financial nuts and bolts of the deal are that Total, through Total E&P UK, has agreed to pay US$1.6mln of back costs while funding a fully carried US$46.5mln work programme.

It has committed to a minimum spend of US$19.5mln and will later become operator of the licences.

The programme will include the acquisition of 3D seismic, the drilling and testing of a vertical exploration well and, depending on the success of the testing of the exploration well, the drilling and testing of a second appraisal horizontal well.

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