30th May 2014 09:17
LONDON (Alliance News) - IGas Energy PLC Friday said it is happy with the results of its due diligence review of Dart Energy Ltd, and it plans to proceed with the acquisition of the company.
The shale gas player said that the deal, which will create a company with the largest area in the UK licensed for shale gas fracking, will now go ahead, with a Dart shareholder vote on the deal expected in August.
IGas announced the deal earlier this month, offering GBP117.1 million in shares to Dart Energy shareholders, meaning they would hold roughly 30.5% on the enlarged company, on a fully diluted basis.
"This transaction puts IGas at the heart of unlocking Britain's energy potential," IGas Chief Executive Andrew Austin said earlier this month. "The transaction further strengthens our position financially, operationally and also significantly increases our licensed acreage as we seek to unlock the untapped energy resource that exists in Britain."
AIM-listed IGas currently produces about 3,000 barrels of oil and gas equivalent per day from 110 sites across North West England, the East Midlands, the Weald Basin in Southern England, and Northern Scotland. It operates the UK's only coal-bed methane pilot site, at Warrington in the North West, and is appraising and exploring its North West and East Midlands acreage for its shale and coal-bed methane potential.
Dart, which is listed in Australia, has 24 UK licenses with potential for shale gas or coal-bed methane extraction. It has already done deals with GDF Suez and Total of France to develop some of the assets.
In the US, fuel prices have been falling sharply as fracking has become commonplace across such states as North Dakota and Mississippi.
However, so far in Europe fracking has had mixed results, often being either controversial or unreliable. In the UK, there have been major protests against the method, which critics fear will pollute water tables in rural areas and may cause small earthquakes.
The shale industry in the UK is undergoing a major push, with companies such as Total SA, Cuadrilla Resources Ltd and Egdon Resources developing fracking operations around the country.
Hydraulic fracturing, otherwise known as fracking, involves extracting gas trapped in shale by pumping in pressurised water and chemicals.
IGas shares were up 0.2% to 133.25 pence on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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