(Adds AJ Lucas comment)
By Nina Chestney
LONDON, Nov 4 (Reuters) - Shares in British shale gas
explorers fell on Monday morning after the government announced
at the weekend that it is imposing a moratorium on fracking.
On Saturday the government said that the gas extraction
technique risked causing too much disruption to local
communities through earth tremors.
Fracking, which involves extracting gas from rocks by
breaking them up with water and chemicals at high pressure, is
fiercely opposed by environmentalists who say it is at odds with
Britain's commitment to reach net zero carbon emissions by 2050.
The government had previously signalled its support for the
shale gas industry as it seeks ways to cut Britain's reliance on
imports of natural gas that is used to heat about 80% of
Britain's homes.
IGas shares tumbled by as much as 20%, while shares
in Egdon Resources fell by 14%.
Leading shale gas explorer Cuadrilla is 47.4% owned by
Australia's AJ Lucas with a fund managed by Riverstone
holding 45.2%. Shares in AJ Lucas were down 24%.
“Cuadrilla will continue to work with the OGA (regulator) to
provide the government with the confidence to lift the
moratorium so the significant high-quality natural gas resources
in the Bowland Basin can be commercialised," said AJ Lucas
Chairman Phil Arnall.
“AJ Lucas will continue to provide Cuadrilla its full
support, recognising that there will be unavoidable delays in
operations and that continued, albeit significantly reduced,
funding of Cuadrilla’s operations will be required."
IGas said it has a "significant recoverable gas resource" at
in the Gainsborough Trough in eastern England.
It estimates there is 630 billion cubic feet of gas in place
per square mile. If applied to its entire acreage in the East
Midlands, this would equate to 270 trillion cubic feet of high
quality natural gas.
"At expected recovery rates, this would equate to satisfying
up to 19 years of the UK's gas demand, giving this country both
energy security for years to come as well as providing billions
of pounds of investment into the East Midlands and the creation
of thousands of skilled jobs," the company said in a statement.
IGas added that wells drilled across the industry, including
its own Springs Road site, show UK shale has the opportunity to
contribute meaningfully to national energy requirements.
Egdon Resources also said that drilling has shown there
could be 540 billion cubic feet of gas per square mile at the
Gainsborough Trough.
"Whilst growth of our unconventional resources asset base
has formed an important and successful part of Egdon's strategy
over recent years, it should be remembered that Egdon also has a
broad range of conventional oil and gas assets within its
diverse portfolio," said managing director Mark Abbott.
(Reporting by Nina Chestney
Editing by David Goodman)
