Eden Energy has agreed to sell its entire UK coal seam gas and shale gas portfolio to unlisted UK public company Shale Energy for £10million.
This consists of a cash payment of £750,000 and £6million in shares of Shale Energy, which is planning to list on London’s AIM market.
The £3.25million balance will be payable in two equal tranches on the independently verified best estimate of recoverable gas of 500billion cu.ft and, secondly, when the reserves estimate reaches 1trillion cu.ft.
The sale assets comprise Eden’s 50% joint venture interests in 17 licences (PEDLs) in England and South Wales and its 100% interest in a further three PEDLs in South Wales.
These have unrisked P90 resource volumes of shale gas in the Numurian Measures on 7 PEDLs in South Wales of 12.8TCF of recoverable gas (Eden 6.35TCF) and gross contingent resources of coal seam gas across the 10 PEDLS in South Wales of 980BCF of gas.
Shale Energy was incorporated to pursue shale gas opportunities and has been examining possible projects in the US.
The Heads of Terms is largely non-binding and conditional on a number of matters including Shale Energy completing a further capital raising of £5million as a pre-introduction to listing on AIM.
Meanwhile, Egdon Resources has raised the East Midlands official estimate of shale gas resources to 16TCF.
Apparently this could be equivalent to 12 years’ worth of North Sea production.
Egdon made the announcement when it purchased 60% of a PEDL in Lincolnshire, located next to two areas for which it already has licences.
Whilst Egdon’s initial focus will be on drilling a conventional exploration well, Mark Abbot, MD at Egdon, said that the deal provides the company with “increased exposure to shale gas potential.”
Meantime, British Geological Survey is expected to increase its estimate of UK shale gas resources shortly. It is believed that its official estimate will be revised to between 1,300 and 1,700TCF, an increase of over 200 times.