LONDON -- Shale gas is arguably the hot topic in energy these days, with companies across the globe keen to replicate the huge finds made in recent years across the U.S.
In the U.K., the privately held Cuadrilla Resources has grabbed most of the headlines, with its exploration work around Blackpool proving particularly controversial. However, AIM-quoted IGas Energy is also a notable player.
Today, IGas revealed its latest estimates for gas in place across its licenses in the North West of England, which are 100% owned and cover some 300 square kilometers. IGas' previous estimate was 9 trillion cubic feet, but this has been revised to 15 trillion to 172 trillion cubic feet, with 102 trillion being the most likely estimate.
Typically, only a small amount of gas in place, perhaps some 10%, could turn out to be commercially recoverable, and further testing work will need to be done before any large scale development commences. For some perspective, though, the whole of the U.K. uses 3 trillion cubic feet per year at present, and our entire proved reserves stand at around 7 trillion cubic feet.
Therefore it wasn't surprising that IGas shares surged some 10% on this news to stand at 102.5 pence, valuing the company at around £190 million. That said, the shares still trade at some way below the 150 pence level they spiked to at the start of 2013, after the U.K. government lifted a temporary ban on shale exploration, and only just above the 95 pence per share level where its last fundraising took place in January.
Although data from 20 wells was used in making this latest estimate, only one of these has been drilled on the area that IGas owns. The company plans to drill two more wells in this area later this year, and estimates the cost of this program will be up to £15 million. IGas is also looking for partners to farm in to its exploration licenses to help with the cost of further development.
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The article IGas Energy Soars on Huge Shale Gas Upgrade originally appeared on Fool.com.
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