Egdon Resources doubles UK shale-gas acreage
ODIHAM, United Kingdom (Bloomberg) -- Egdon Resources Plc will almost double its UK shale gas-exploration acreage after agreeing to buy assets from Alkane Energy Plc in the latest consolidation among the country’s unconventional fuel drillers.
Egdon agreed to buy Alkane’s 10 shale licenses in exchange for 40 million shares, worth about 8 million pounds ($13 million). Alkane will hold about 18% of Egdon, which is also selling about 35 million shares to fund works and complete the deal, the buyer said in a statement.
The deal is the second this month involving UK shale gas as explorers acquire assets before commercial drilling begins. IGas Energy Plc last week agreed to buy Dart Energy Ltd., which in January unveiled an accord with France’s Total SA to fund exploration. That marked Total’s entry into the UK shale industry.
Egdon will hold 140,176 acres (56,727 hectares) of prospective shale-gas acreage, making it a “newly created Big 3 shale player,” Alkane said in a statement. The license will be divided, with Egdon holding the lower shale gas areas and Alkane the upper.
The UK offers incentives to shale developers to tap the Bowland basin, which may hold about 1,300 Tcf of gas according to the British Geological Survey. That’s enough to meet demand for gas for 50 years, assuming U.S. extraction rates of 10%, Bloomberg calculations show.