StockMarketWire.com - IGas Energy has been formally offered a further 10 blocks in the second tranche of the UK's 14th onshore oil and gas licensing round. These ten blocks, together with the seven blocks awarded in the first tranche, represent a total additional gross area of c. 270,000 acres of which IGas's net interest is c. 162,000 acres. This represents an acreage increase of approximately 25 per cent. Following the formal award of these blocks, IGas will have a total of c. 876,000 net acres under licence. The Oil and Gas Authority will now progress towards issuing petroleum exploration and development licences over the blocks offered, once specific details have been agreed including the work programme for each licence. Further details, including an interactive map, can be found at https://www.gov.uk/guidance/oil-and-gas-licensing-rounds.

In the East Midlands and Yorkshire, blocks SE31c and SK59b have been offered to a joint venture comprising IGas, Total E&P UK Limited and Egdon Resources plc.

IGas will be operator of the licences with a 35% interest, Total will have a 50% interest and Egdon a 15% interest. These licences are located in the Gainsborough Trough close to where the Company currently operates 80 sites, the majority of which have been in production for many years. IGas will conduct a shale work programme including 3D seismic surveys and three firm wells.

The East Midlands work programme also contains a further two drill or drop wells targeting conventional prospects. In the North West, blocks SJ64, SJ65, SJ75 and SJ76 have been offered to a joint venture comprising IGas and GDF SUEZ E&P UK Ltd. IGas will be operator of the licences with a 65% interest and GDF will have a 35% interest. A work programme consisting of 2D seismic and two drill or drop wells will help to establish the hydrocarbon potential of the shale in this area. In the South East, IGas has been offered blocks SU81c, SU81d, SU90a and TQ34d and will be the operator with a 100% interest. These blocks have conventional oil and gas potential and are located adjacent to the IGas Singleton and Bletchingley fields in the Weald Basin. A work programme consisting of 2D seismic acquisition will drive the decision on the three drill or drop wells. The work programmes, set out above, will be phased and are subject to finalisation with the OGA. Under these work programmes, IGas has a minimum committed spend in the first two years of approximately £3 million net to IGas, focusing on geological studies and seismic assessments. This will be followed by exploration drilling, targeting the prospective hydrocarbon bearing formations.

A map showing the location of all the blocks formally offered to IGas in the 14th round will be available at http://www.igasplc.com/investors/publications-and-reports.

Chief executive Stephen Bowler said: "We are delighted to have been formally offered these new blocks by the OGA, which significantly increases our acreage by approximately 25% across the key UK shale basins.

"We are also pleased to be strengthening the relationships with our existing partners Total, Egdon and GDF in these strategic areas.

"We already operate over 100 sites across the country and will continue to ensure that, in all existing and new areas, we engage with the local communities.

"This is a critical time for the future of Britain's energy mix as gas, of which 50% of our consumption is currently imported, is central to our energy security as we transition to a lower carbon environment."


At 2:28pm: [LON:IGAS] Igas Energy PLC share price was +1.26p at 21.63p



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