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Good day today, albeit that the reasons for it are absolutely heartbreaking.
For those interested, more MP questions and answers re fracking
https://questions-statements.parliament.uk/written-questions?SearchTerm=Frack&DateFrom=11%2F05%2F2021&DateTo=31%2F07%2F2022&AnsweredFrom=&AnsweredTo=&House=Commons&Answered=Any&Expanded=True
Am I correct in that when the Government pulled the plug on Cuadrillas fracking as a Green vote catcher, the Cuadrilla subsidiaey company undertaking the exploration was wound up having list £millions and no reimbursement. Equipment and skilled manpower was redeployed. So how on earth can fracking in Lancashire ever return with that kind of painful loss, and a probability that £millions will be lost when the next Government decides to pull the plug after the first "earthquake" or signs of contaminated sub surface water. Government assurances and contractual public/private partnership might be the only way now but that would take at least 3 years to re-drill, establish pipelines and become a major contributor to the UK economy. Best we now ditch it and rely on oil and gas from Texas and become beholding to the worlds dominating country as opposed to the non world dominating Russia
Really hoping this does not turn into a quick spike similar to last Aug/Sept. Things are so **** in the world at the moment it is good to see a share increasing in value.
well done. Let the rest us ride it up then. Why you telling us you sold.
Just sold some more at 26p 3.30pm ...now 30% up today .
Mark - whilst I understand your moral dilema, some of us have been invested here for a long time and part of my reasoning was always that we would need to improve energy self sufficiency. Putin is simply demonstrating why. You can't second guess a full blown looney, but our government and others should have been better prepared in this sense - the world relying on Russia was never going to go well indefinately.
A crane has arrived today at Cuadrilla’s fracking site where two wells are due to be plugged and abandoned after instruction from the Government’s Oil and Gas Authority. These wells have been partially completed and would have harvested a small but significant supply of home produced natural gas.
Bought them back on the 2nd for 19.15p
Sell below for 23p was day before Tuesday 1/3/22
Sold again today 23.2p 11am 26p by 3pm .
Biden and Boris just about to announce a ban on US imports of Russian oil. This will push up prices both for oil but also for gas if Putin retaliates by cutting gas exports to Europe. it’s sad to profit on the back of Ukraine suffering but that’s the way it is. Off we go.
I agree.
Think government will first test sentiment to see if environmental lobby is strong enough to counter those with high gas bills and desire for domestic secuirty of supply. Once that is in public domain should see significant increase.
Advantage of fracturing in current environment is fast timeliness from decision to first gas production. Any other offshore initiatives will take several years.
It's also likely to be an issue in Europe too, particularly in Poland, Germany and France.
Just need a customer friendly word for it, 'HydGas' ?
Looks like the energy crisis has now become Boris’ number one problem. It will be the headline in the Tory Daily Mail tomorrow influencing their key support. I can’t see how Boris can now refuse to back fracking, even if reluctantly. From the American point of view they must be annoyed and bewildered and indeed why should they help us out when we don’t have the sense to help ourselves. My feeling is that this issue will hit the fan in the next week.
IGAS management get paid to get these things right. In November at the time of the RBL determination, they announced swaps of 216000 bbls. By the update in early March it was 231000 bbls. The implication is that they have been contracting swaps on a regular basis (indeed that accords with their express policy) regardless of the prospects for the oil market. it So you can't really defend them on the basis that they didn't know that the oil market was tightening or that Putin was threatening Ukraine. Even Joe Biden noticed that.
The real problem here is IGAS policy of rolling hedging. That works in IGAS' favour when oil prices are falling. But right now when prices are spiralling upwards its a disaster. I guessed a $6m loss but now its more likely $10m. In other words, hedging losses good, but hedging against making profits? How stupid is that?
Looking beyond this policy failure, we have a situation Houston. What should IGAS be doing now that oil has gone over $120 a barrel? What would Captain Hindsight do? I would be very happy to lock in a price of $120, even if that risks missing out on the price going even higher. Therefore, instead of hedging around 50% of the years production, why not increase this to 80% or more of the whole year's production?? Binge out on swaps every time the price goes over $120. Sadly our IGAS management are bogged down in fashionable eco "transition" foolishness that will never replace oil earnings, and are too unimaginative and cautious to make such a bold move. I am beyond frustrated with them.
Morning all. Gas opened up at 800p/th this morning. Many folks will be looking for a way to expose themselves to that and IGAS is the natural domestic play
The problem here is that you have, like most of us, 20/20 hindsight. The hedging was presumably done before the last two phases of the COVID epidemic and before anyone anticipated the Ukraine invasion.
However regarding future business strategy I suspect that Igas had more or less given up on onshore O&G exploration which is why they diversified into thermal. I guess they will rapidly be making a U turn. Given all the recent support in the press and from the influential right wing of the Tory party I wonder if more people will be taking a punt on IGAS and EGDON.
Despite decades of experience of oil booms and busts, IGAS management usually manage to get it wrong with their hedging. They have over 231,000 bbs hedged at $74 a barrel. That means that instead of getting at least $100 available currently they will get $74. So they have lost in excess of $6 million, presumably mostly hitting the bottom line in this current half year. Just great. This helps to explain why the recent results announcement was so low key. They knew they had blundered again. When challenged they say the the borrowing terms require them to hedge 50% of production on a rolling basis. But guess who negotiated the terms - yes IGAS management. The 231000 represents about one third of a years production. so hopefully the remainder can be sold at a higher price. The shocking thing is that IGAS should have been shaping up to pay off their borrowings this year, and get rid of these covenants, but little chance of that now. Idiots.
Short lived!
just spent about 5 mins in auction there.
Something brewing?
GLA
danno
Returning to IGas today after several years away. Why?
Short-term opportunity whilst energy prices are silly
Radio 4 Today Program talking about return to Hydrocarbon energy
AND... I finally have a meaningful way of investing in Cornish Lithium Ltd beyond a vastly over-subscribed crowd fund. CL are a very exciting company IMHO, the technical presentations I've seen to quarry industry professionals have been excellent.
Crude oil up to $110 per barrel and gas price up nearly 30% today with consequent increases in the cost of living for the average person, and Johnson STILL won’t allow fracking. Idiot.
Luckily I sold all my shares yesterday as I get nervous when a company is overdue with a trading update, it suggests to me they are spending time working out how to spin news, plus of course the sp has had a very good run recently so the update was going to have to be very good just to keep those gains. Good medium term upside imo but happy to watch from the sidelines at the moment
No surprises in there really, good or bad. Cash up whilst making significant capex reinforced my view that this is self funding energy transition play. A little disappointed that the update didn't play on the current energy market opportunities as they do seem to be significant. Not leveraging the Ukrane situation is classy, but the appetite for any form of energy self sufficiency and the general demand situation for hydrocarbons could have been utilised. Some timescales around geothermal options there are new to me so I suppose that is a form of progress. We need Boris to push councils who are dragging heels on planning decisions for many energy proposals as the governments did in the past with Wind IMO.
The question was answered as follows
“ Gas wells need to be safely decommissioned at the end of their useful life. The Oil and Gas Authority is acting within its statutory remit to require the operator of these wells to decommission them.”
Doesn’t say if the govt are going to stop them though, does it?
Sliced a few for 23p
I also think they hold licences in the central belt in Scotland.