Yet few people have heard of England’s newest fracking company because Igas is complicated: the AIM-listed company is not simply a fracker – it drills for several kinds of gas, and it’s main business is oil.
But recent test results have thrown Igas’ fracking operations into the news. At Ince Marshes near Liverpool Igas recently doubled its estimate of Shale gas available. Despite questions as to the nature of the estimate, our calculations suggest this would require around 2500 wells to produce.
At Ince Marshes Igas has found two types of gas: Shale gas (from the same formation being investigated by Cuadrilla in Lancashire) and a form of unconventional gas that causes similar problems: Coal Bed Methane (CBM).
CBM wells can be fracked just like shale wells. Indeed, Igas fracked a well at Doe Green in Cheshire (just south of Ince Marshes) a couple of years ago. (see Igas CEO’s admission to parliament – search for ‘Doe Green’).
CBM operations are dogged by accusations that gas leaks from the producing area. A recent study in Australia found 44% of CBM gas wells leaking in a gasfield in Queensland. In 1987 Rawhide in Wyoming was abandoned after CBM operations caused methane and hydrogen sulfide to leak to the surface (p20) – the company involved later settled out of court (see footnote 3 here).
Questions also arise as to what to do with the the noxious water produced.
The company hopes Doe Green will house its full-scale production well (i.e. it can be connected to a pipeline and the gas sold) in the first half of 2012.
Meanwhile Igas is also an established onshore oil producer, producing a total of 2600 barrels a day from more than 100 wells nationwide.
Since 2008 Igas has made two acquistions – the first, of Nexen Energy – gave Igas access to 5 new CBM PEDL licenses in the north of England (previously they had one). Then Igas acquired Star Energy, gaining oilfields in Hampshire and West Sussex. Investors like this strategy of buying up smaller players – in March 2011 the company raised GBP 20.6m via the AIM stock exchange.