Gas-focused power company Alkane Energy has agreed the sale of its shale interests in 10 licence areas to Egdon Resources.
In return for the assets Alkane will gain 18% shares in Egdon, valued at around £8million.
Interests in the 10 licences will be split between the two companies, with Egdon acquiring a 100% interest in the lower interest assets, containing the shale gas potential, and Alkane retaining a 100% interest in the upper interest.
Earlier this year the company announced it was looking for a partner to help it develop its shale resources in the UK, while also funding the growth of its core power generation business.
“Alkane Energy’s review highlighted our desire to work with partners who could bring skills, resources and scale to our shale acreage to enhance its value through the development stages,” said Neil O’Brien, Alkane Energy’s chief executive.
“In addition, we believe the deal with Edgon will create an entity which can powerfully bid for further acreage in the 14th onshore licensing round.
“Working in combination, Egdon and Alkane have the scale and expertise to fund the development of shale assets. In addition, through its shareholding in the enlarged Egdon, Alkane will have an important voice on the board.”
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