A Scottish specialist in the extraction of natural gas from coal seams has announced a £4.5million investment in the business from an Australian company.
Composite Energy, based in Stirling, said yesterday Dart Energy had put in the cash in exchange for a 10% stake in the firm.
Dart also now has options to increase its stake in the Scottish business and take it over.
Composite said the £4.5million would be used to help to fund its growth.
Dart is focused on the development of coalbed methane (CBM) in Australia, Indonesia, China, India and Vietnam.
The investment in Composite provides it with exposure to opportunities in the CBM and shale-gas sectors across the UK and the rest of Europe and is part of its wider strategy to create a global CBM company.
Composite chief executive Keith Lough said: “Dart is a highly experienced CBM operator and one of the few companies in the world to have taken CBM from exploration through to production.
“We are delighted to welcome Dart not only as an investor in Composite but, as we continue to build our CBM and shale-gas extraction business in the UK and Europe, we also expect to benefit from the technical experience of the Dart team.
“The funds received from Dart will be utilised in drilling CBM and shale-gas wells in PEDL133 (a licence in the Grangemouth area) in Scotland, securing further licences and supporting drilling activities in a number of European countries. The investment and involvement of Dart complements our 2008 deal with BG Group whereby Composite and BG Group each have a 50% interest in licences awarded in the 13th UK onshore licensing round.
“Ten of the 20 commitment wells under those wells have been drilled so far and the results are being evaluated.
“Composite is designated operator of the licences and all the wells were successfully drilled by our wholly owned drilling subsidiary, Geometric Drilling.”
Dart Energy has also been granted options to make a further investment in Composite and to make an offer to acquire the company in a deal valuing it at more than £44million. These options expire next January and June, respectively.
Simon Potter, CEO and managing director of Dart, said: “Our stated strategy is to grow our business into Europe and the work Composite has already done in laying the foundations for a strong UK and European CBM business provides us with ready access to high-quality assets and a strong commercial and technical team. We look forward to developing our relationship further with Composite in delivering our European aspirations.”
Composite was formed in 2004. Shareholders include its management, the Royal Bank of Scotland, BG Group and business “angels”. It has 25 employees.