Following Centrica's farm into the Lancashire Bowland licence in June last year, a plan has been developed for the appraisal of this asset which will involve the drilling, hydraulic fracturing and testing of up to four wells at two different sites (Preston New Road and Roseacre Wood).
Cuadrilla recently submitted applications for the two wells sites with the Lancashire County Council (Council). A key element of these applications is a comprehensive Environmental Impact Assessment (EIA) for each well site. The Bowland Joint Venture partners conducted the EIA in conjunction with a specialist independent consultant. They also undertook extensive community engagement to explain the benefits of shale gas and how any actual or perceived risks are managed and mitigated.
Through this process, the applications included measures to address community feedback. For instance, a significant reduction in mains water requirements during hydraulic fracturing was proposed (through the reuse of fracturing fluid). This has several other consequential benefits such as reducing the number of heavy goods vehicle movements and the number of fracturing pumps required. This ultimately leads to reduced noise levels and minimises disruption.
The Council is currently reviewing the applications as required under statutory planning procedures. Cuadrilla expects to commence operational work at the first of these sites in the first quarter of next calendar year.
The UK has long been reliant on oil and gas from the North Sea for much of its energy requirements. However, this source of energy is in decline and the country is becoming increasingly reliant on gas imports. There is recognition from the British government and the other major political parties of the need to secure alternative and reliable energy supplies.
In this context, it is encouraging that the British government introduced favourable fiscal incentives for onshore oil and gas exploration. In addition, changes are being proposed which should streamline and simplify the planning procedures to conduct shale gas exploration and production activities.
Furthermore, the British Geological Survey (BGS) report released in July 2013 estimated that gas-in-place within the Bowland Basin was 1,329 trillion cubic feet ("Tcf"). It was also encouraging to see Total and GDF Suez enter the Bowland Basin during the year confirming it as a leading prospective shale gas play in the UK (and possibly across Western Europe).
Cuadrilla has confidence that shale gas can contribute to the UK’s energy requirements as well as serve as a bridge to a cleaner energy environment. Cuadrilla will therefore be investigating opportunities to acquire additional acreage under the UK’s Department of Climate Change (DECC) 14th Licensing Round.
Outside of the Bowland Basin, Cuadrilla completed a successful horizontal exploration well in the south of England within the Weald Basin on the Bolney licence. The well confirmed the presence of hydrocarbons. A planning application was submitted and approved to flow test the well.
Cuadrilla has also maintained its exploration interests in The Netherlands and Poland. The Dutch Government has commissioned a comprehensive strategic environmental assessment of the impact of shale gas. The report is expected in 2015. Following the release of this report, Cuadrilla intends to apply for permission to commence exploration operations in that county. In Poland, Cuadrilla is analysing seismic data acquired in 2012/13.