9th May 2014 09:02
LONDON (Alliance News) - IGas Energy PLC Friday said it had an agreed deal to buy Dart Energy Ltd for GBP117.1 million in shares, a deal that will create a company with the largest area in the UK licenced for shale gas fracking.
The shale industry in the UK is undergoing a major push, with companies like Total SA, Cuadrilla Resources Ltd, IGas Energy 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.
In a statement, IGas said Dart shareholders will receive 0.08117 IGas shares for each Dart share, equivalent to AUD0.1898 per Dart share, and will hold approximately 30.5% of the enlarged company on a fully diluted basis.
Dart's board has unanimously recommended the deal, and shareholders representing 30.5% of Dart's voting rights have indicated that will support the deal unless a better one comes along, IGas said.
"The combination of IGas and Dart will create a market leading onshore UK oil and gas company with the largest area in the UK under licence of over 1 million net acres including major UK shale basins," it said.
"This transaction puts IGas at the heart of unlocking Britain's energy potential," added IGas Chief Executive Andrew Austin. "The transaction further strengthens our position financially, operationally and also significantly increases our licenced 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.
IGas shares were up 0.4% at 130 pence Friday morning.
By Steve McGrath and Tom McIvor; [email protected]; @SteveMcGrath1
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