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UK Operator Doubles Shale Estimates; Others Await Frack Report

IGas Energy plc, which explores in the United Kingdom's onshore, said shale gas reserves at its Ince Marches prospect in Cheshire, England, may be close to 10 Tcf, or double the original estimate. The producer now is looking for a farm-in partner.

After reviewing data from the first drilled well, gas reserves appear to be twice the independent pre-drill estimate of 4.6 Tcf, IGas engineers said.

"We have conducted further analysis of the logs and samples from the well at Ince Marches," and the first well "is a particular highlight," said CEO Andrew Austin. "The results are very encouraging with total organic content of between 1.6% and 3.7%. We understand the same Bowland Shale in neighboring licenses has been flow tested at rates exceeding many results seen elsewhere in Europe."

The Bowland Basin is estimated to contain as much as 200 Tcf (see Shale Daily, Sept. 26, 2011). To put the basin's prospects into perspective, initial testing has indicated that the shale play may be as much as 10 times thicker than the Marcellus Shale.

"The provisional independent pre-drill estimate of the shale gas initially in place (GIIP) in the IGas acreage in the northwest of England was up to 4.6 Tcf; IGas interest is 100%," said Austin. "Having now drilled and logged the shale, the GIIP would more than double using these initial log results and applying a consistent methodology. Following a number of inquiries from interested parties, we are now launching a process to engage a suitable farm-in partner to participate in further wells to corroborate these results and to develop our shale resource."

UK-sourced hydrocarbons "are going to play an increasingly important role in the future energy mix of the country," he said.

In another piece of possibly encouraging news for unconventional drillers, one of the top officials for the UK Department of Energy and Climate Change (DECC) said risks may be involved with shale gas drilling, but most of them can be managed safely.

The DECC imposed a drilling moratorium using hydraulic fracturing (fracking) and launched an investigation late last year following two small earthquakes in the Bowland Basin near a drilling site operated by U.S.-based Cuadrilla Resources Ltd. (see Shale Daily, Nov. 4, 2011). Cuadrilla, which independently contracted and reported that fracking had in fact triggered the minor seismic events, shuttered its operations near Blackpool, in Lancashire, England, ahead of the fracking moratorium.

The investigation is over, and a report is nearly completed and will be presented to the public "soon," said DECC's Tony Grayling, who heads the agency's climate change and communities. "There are significant environmental risks associated with shale gas, as there are with other industrial activities. We think those risks can be managed."

Once the report is presented, a public comment period would be scheduled, and the DECC would decide whether to lift the drilling moratorium. No additional details or timeline was offered.

Parts of Europe, including France, remain skeptical of the fracking stimulation practice because of water pollution fears. However, no significant risk to groundwater exists at Cuadrilla's drilling sites in Lancashire, and no permit was required to operate there, according to Grayling. The fracking chemicals used by Cuadrilla were not considered hazardous under the UK's groundwater directive, he said.

In addition to Cuadrilla and IGas, producers holding leaseholds in areas of the UK that may hold shale gas resources include BG Group plc, Dart Energy Ltd., Celtique Energie Ltd. and Reach Coal Seam Gas Ltd.

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