Member Article

Centrica invest £160m in shale gas licence

Centrica has announced a £160m investment in 25% of the Lancashire-based Bowland exploration licence, which it will acquire from Cuadrilla Resources and AJ Lucas.

The shale gas licence will see Centrica pay £40m in cash along with a £60m exploration and appraisal cost.

A further £60m could be paid if Centrica decides to continue developments following the exploration and appraisal phase.

The Bowland licence is operated by Cuadrilla and three exploration wells have already been drilled so far, with data obtained to confirm the shale formation thickness presence of natural gas.

Initial findings suggest there could be 200 trillion cubic feet of gas under the licence in Lancashire, however further drilling is required to establish the scheme’s commercial viability.

Mark Hanafin, managing director of Centrica’s International Upstream business, said: “With North Sea gas reserves declining and the UK becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the UK.

“The Government’s clear commitment to developing the UK’s shale gas industry is creating the right environment for companies to invest and to deliver those benefits.

“This transaction presents an attractive opportunity for Centrica to explore the potential and commercial viability of natural gas from shale in the UK, while utilising its expertise as a responsible operator and developer of UK gas resources.”

This was posted in Bdaily's Members' News section by Miranda Dobson .