UK-based coal bed methane developer IGas Energy (IGas) has revealed that the company has met its stated objectives for 2009, which keeps it on track for commencement of full scale UK Gas Production next year.
IGas has said that the harshest winter for some 40 years in the UK has lead to gas interruptions and highlights the need for an alternative to imported gas to maintain security of supply. However, IGas now has the funds, the technical knowledge and the sites close to major industrial areas to start delivering secure gas commercially.
The company said that despite severe weather conditions it continues to produce at Doe Green where it has three lateral and one vertical wells. One of these laterals (Doe Green well 2) has been in production for over a year, the other laterals and vertical are currently dewatering. Gas produced at Doe Green is being used to generate electricity, which is being sold via the electricity grid.
In October 2009, IGas finalised the well design for its site at Keele University Science Park and the land agreements were in place. The company said that work started on the site as planned during December.
The objective of this well is to produce gas from a lateral in the Great Row seam, which is at a depth of 1,757 feet from surface and is around 11feet thick at this location. Logs from the group’s well at Willoughbridge, 5.5 miles south west of the location, provide encouragement as to the permeability of the coals in this area and the group is expecting that the production results will be at least in line with those experienced at Doe Green.
Planning has now been granted for a full production site at Ellesmere Port. The decision was made under delegated powers. Before the end of 2009, planning permissions were submitted for a further four full production sites dispersed in the company’s acreage in the North West of England. A typical full production site is expected to produce between four and ten million standard cubic feet of gas per day. These are the first applications to be made under the framework agreement announced in 2008 with Peel Environmental.
As part of the agreement Peel has given unlimited access to their entire land holdings in the North West for the purpose of identifying those sites suitable for CBM operations. The agreement includes commercial arrangements for leases of sites once planning permission has been granted.
In August 2009, IGas acquired 100% of PEDL 78-2, which lies to the south and west of the company’s existing Swallowcroft area. This increased the company’s total acreage by around 100sqkm.
In December 2009, the company concluded an agreement with Nexen in which it increased its interest in each of the point of Ayr Licences to 75% and should assume operatorship. The increase in the company’s percentage interests in the Point of Ayr Licences increases its exposure not only to the gas in coal but also to possible conventional and shale opportunities.
IGas expects to drill a well in Point of Ayr later this year. Depending on the final well design, it may be possible for data acquired, whilst drilling such a well, to address the reservoir quality of these leads and hence any further potential upside.
IGas estimates that it has net 2C contingent recoverable resources of some 0.8 tcf of gas (140 million boe), or sufficient to supply electricity to approximately 7% of all UK households for 15 years.