While news around the UK’s onshore oil and gas landscape last year focused on earthquakes unsettling Blackpool, there is in fact rather more happening than just that.
Following a spate of corporate activity last year and early this, 2012 is shaping up to become a time for development as coal bed methane (CBM) and shale gas explorers look to demonstrate Britain’s potential.
Graham Dean, a director at Banchory-based Reach Coal Sea Gas, said: “Shale especially is very under explored and there is a very large range of resource estimates.
“The British Geological Survey estimated 5,29trillion cu.ft (150billion cu.m) of probable reserves, while Caudrilla has estimated 200TCF just for its Bowland Basin, which is an enormous difference.
“The number of wells being drilled is slowly starting to increase. Most of the main players will be drilling some wells this year, largely appraisal of shale gas. There will also be quite a lot of development wells for CBM.”
Peter Redman, chairman of the United Kingdom Onshore Operators Group, agreed and said there would also be more conventional oil and gas onshore activity towards the end of the year.
The year has been framed by a flurry of corporate activity. Australia’s CBM firm Dart Energy buying Scottish firm Composite Energy, giving it 11.6TCF gross oil and gas in place in the UK and Poland, and then the unconventional assets of Greenpark Energy for $42million.
CBM and shale firm IGas recently bought Star Energy’s UK assets off Malaysian firm Petronas for £110million in a reverse takeover, giving it contingent resources of 316million barrels oil equivalent (boe) as well as production.
It said this would make it one of the largest onshore players in the UK, following its purchase of a number of onshore assets from Nexen Petroleum earlier in 2011.
In a smaller deal last month, coal mine methane (CMM) firm Alkane Energy said it had agreed to buy the remainder of Greenpark Energy, including CMM assets and power generation, for £5.7million.
None of which has deterred from drilling activity. IGas says it plans to drill between four and six wells by Q2 this year.
Last month, it said a well at Ince Marshes in Cheshire encountered “very significant” shale gas in a 300m (1,000ft) section. Pre-drill gas in place was estimated at up to 4.6TCF.
At its Doe Green site, a CBM pilot production site, it said two coalbed methane wells had been completed and production testing was expected at the end of this month.
Dart has drilled a CBM pilot production well at Airth, north of Falkirk, with planning to connect to the local gas network, and is planning further production wells this year and shale appraisal.
It is also active at a site near Gretna Green, near the Scottish border, and a number of locations in England.
Egdon Resources is assessing CBM in the East Midlands and is also planning a shale exploration well this year.
Caudrilla, whose activities attracted national attention after a series of small earthquakes linked with its drill site by Blackpool, is looking to start drilling again for shale.
Europa Oil & Gas is examining its Humber region licences, where it says there is “potential for significant shale gas resources” as well as potential underground coal gasification along the eastern coast of England.
Reach CCG joins Dart in central Scotland and hopes to drill a CBM well in May, but it will also be coring deeper shales to help evaluate potential in the area.