SP up 4p even though no news. Is there in fact some news on it's way that us ordinary folk don't know about, or some change in sentiment in the market towards shale on the back of the Ukraine crisis, or just some random fluctuation. Time will tell but at least the SP isn't continuing to slide which it has in the past when there is no positive news. GL all.
Thats true what you say, up to a point. The problem is that LNG prices are fixed against oil prices and that link has to be broken before the price can go down. However, the USA alone imported 25% of all of the oil produced in the world, that is a lot to take out of the market. As more and more countries come on tap the demand for oil will plummet. Not initially, because OPEC will try to maintain the price by reducing production, but even that will not help in the long run. OPEC have to live and most do not produce much, except dates and oil. So the Shale effect may be a few years down the line, unless, of course, governments intervene. There will be public pressure on them to do that
UK shale won't have much effect on the gas price short term, all the better of course because a decent price will increase the profit for the the pioneer producers. But 10-15 years from now shale production will have spread across Europe; there are good prospects in Poland, Spain and France at least, and if it can be marketed politically as a bridge fuel to the green lobby, then the supply/demand balance will shift in the direction of lower prices IMO. Regarding the 150 I think the Barton results in a few months time, and/or a farm-in might push the SP in that direction. Can't see a better bet for a good return over the next couple of years.
LONDON, April 2 (Reuters) - Shale gas production in Britain could begin within four years if the current crisis in Ukraine escalates to such an extent that a national state of emergency is declared, the chief executive of Cuadrilla Resources said.
Britain is in the early stages of exploring for shale gas to counter its growing dependence on imports, and geologists have estimated it could have shale resources equivalent to several hundred years of demand.
Cuadrilla is the only company in Britain so far to have used hydraulic fracturing, or fracking, in test wells in Lancashire.
It is two to three years away from establishing whether its British shale gas operations are commercially viable, Chief Executive Francis Egan said at an event at think-tank Chatham House on Tuesday evening.
If the Ukraine crisis worsens dramatically and Britain declares a state of national emergency and removes all constraints, "it would take two, three or four years to get up to appreciable production rates," he added.
In an emergency situation, Cuadrilla could start constructing a drilling site immediately and start drilling after two months. Drilling a well would take around four months, and three to four wells would be needed to demonstrate the commercial value of shale gas.
Good realistic post there parkside. Only thing I wouldn't quite agree with is that the US will probably start significant exports in the near future- there is significant political pressure over there for this to start happening.
Fracking cannot possibly halve the gas price in the UK and to think otherwise is economic illiteracy. The UK has almost perfect gas inter-connectability with Europe. The US has little gas export ability save for four LNG terminals that were retrofitted to export gas (they were originally built to import LNG). So the reason why US gas prices have halved is because it is all used in the US - it has to be. Gas found here will be sold to the highest bidder it wont be used to lower the price of gas to a McVities factor in Warrington!! Even Ca-moron has admitted it wont have any impact on price. If the gas is there and can be extracted then it might create jobs, generate some tax and make us a little more sustainable. But the scale involved to produce even 10% of Britain's gas is beyond the industry to develop for years and years. And the NPV impact on IGas (and others) equity is unfathomable right now. So if you see 150p again, flog em.
Hi, if you google "shale licences UK" and follow some links you will find the DECC wall map of all the UK onshore licences. Igas do indeed have licences in the area although the biggest acreages are owned by Cuadrilla and Celtique. The BGS survey is out soon although I don't think an exact date has been trailed. It should be positive for the SP.
I too missed out on selling at 150 but since the timing of the Barton exploration results and also any farm-in by a big player is unpredictable I'd be wary of being out the market for very long. I really believe that if Igas can overcome resistance to test fracking in the north-west then this stock has real potential and that shale gas will bring huge benefits to UK plc. The price of gas in the US has halved relative to Europe in the last 3-4 years, all due to shale gas.
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