Friday, August 1, 2014

News: Egdon acquires Rotherham shale gas interest


Egdon Resources, a leading player in shale gas exploration, has acquired the interest in the current licence to explore for the controversial energy source in Rotherham.

The Hampshire firm has concluded a £6m deal with independent power generators, Alkane Energy to take on an interest in Petroleum Exploration and Development Licences (PEDLs) relating to the deeper section which contains shale gas and conventional oil and gas potential.

Alkane owns the PEDL for the area around Maltby, which extended to all of the hydrocarbons recoverable from the licence area. So far Alkane has been focusing on the extraction of coal mine methane at the former Maltby Colliery that does not involve any form of "fracking" or any other processes of well stimulation associated with coal bed methane or shale gas extraction. The methane is produced by coal left underground, following conventional mining operations carried out over the years the mine was in operation.

Following recent approval by the Government, Egdon Resources has acquired all rights and interests relating to shale gas under the PEDL043 area (which covers Maltby, Braithwell and Conisbrough), a licence which Egdon believes is one of three acquired that has the most shale gas potential.

Egdon is working with international energy firm, Total, who have put forward £30m to deliver up to three shale gas wells, subject to obtaining the necessary consents, in other nearby PEDLs in the "Gainsborough Trough", an area identified by the British Geological Survey as having organic-rich shale underground, and an area which PEDL043 and Maltby are also in.

Dart Energy owns PEDL200 that covers Firbeck, Laughton en le Morthern and parts of Thurcroft and Dinnington. It has a similar agreement with GDF Suez for 13 licence areas including PEDL200 for drilling exploration wells for coal bed methane and shale gas.
A type of natural gas, shale gas has the potential to become an important energy source for the UK, as it is in the US, but extracting the gas using a method called fracking (hydraulic fracturing) has negative environmental impacts.

The government recently opened the bidding process for companies seeking licences to explore for shale gas under the rest of Rotherham.

The licences provide the first step to starting drilling – but do not give absolute agreement to drill. On top of a licence, any further drilling application will then require planning permission, as well as permits from the Environment Agency and sign-off from the Health and Safety Executive.

Alkane Energy paid £7.5m to buy coal mine methane (CMM) assets at Maltby from operators Hargreaves Services last year. It is set to make a further payment of £2m to acquire additional site infrastructure assets six months after the mine shafts are satisfactorily sealed as part of the planned closure of Maltby Colliery. With demolition underway, this is expected to occur by October 2014.

The Maltby site was off-line for the majority of the spring period as the planned closure of the colliery was being completed. However it has now returned to production and Alkane as a whole has generated record weekly baseload output in recent weeks.

It is estimated that over the anticipated 15 year life of the project, some 115 million cubic metres of pure methane will be extracted from the mine void and the coal left underground.

The shale under Maltby is below the coal deposits that were mined for over 100 years until geological conditions could not be overcome and underground operations ceased in 2013.

Alkane Energy website
Egdon Resources website

Images: Egdon Resources / British Geological Survey


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