- AJ Lucas (AJL) emerges as an unlikely winner in global oil and gas supply fears after Britain’s energy regulator lifted a ban on work on Britain’s two shale gas wells in AJL
- The North Sea Transition Authority (NSTA) withdraws an advisory asking AJL to plug and abandon two shale gas exploration wells at the Preston New Road (PNR) fracking site
- AJL subsidiary Cuadrilla now has until the end of June next year to assess its options for exploration sites
- AJ Lucas chairman Andrew Purcell says the current gas crisis in Europe has highlighted the importance of domestic production in the UK
- Shares of AJ Lucas rose 15.8% to 6.6 cents apiece at market close
AJ Lucas (AJL) has emerged as an unlikely winner in global oil and gas supply fears after Britain’s energy regulator lifted a ban on work on Britain’s two shale gas wells. ‘AJL.
In light of the Russian-Ukrainian war and associated energy crisis in Europe, the North Sea Transition Authority (NSTA) has withdrawn an advisory previously issued to AJL subsidiary Cuadrilla Resources, asking the to plug and abandon two shale gas exploration wells in Preston New Road. (PNR) hydraulic fracturing site.
Cuadrilla now has until the end of June next year to assess its options for exploration sites.
AJ Lucas chairman Andrew Purcell said it was a “reasonable” move by the UK regulator at a time of skyrocketing gas prices in Europe.
“It is widely recognized that natural gas will continue to play a key role in the UK’s energy supply for many decades to come, even as the country transitions to a net zero CO2 economy,” Mr Purcell said. .
“We remain convinced that the Bowland shale gas resource has the potential to be a very significant contributor to the UK’s energy supply and, in particular, a cost effective source of fuel for heating homes and businesses. British.”
The Cuadrilla wells are the only two horizontal wells drilled and hydraulically fractured in British shale rock, according to AJL.
While previous flow tests from the well confirmed the presence of a “very high quality natural gas resource”, the UK oil and gas regulator introduced a ban on hydraulic fracturing in November 2019, meaning that the AJL subsidiary could never fully fracture or flow test the wells. .
Now AJL said the ongoing gas crisis in Europe has highlighted the importance of domestic production in the UK.
“Given the rapid decline in indigenous gas production in the North Sea and the current gas price and supply crises in the UK, we consider that the billions of pounds spent each year on importing expensive gas from the Middle East, United States and elsewhere could be better directed, in part at least, on the development of what is recognized as an important national resource of shale gas,” Mr. Purcell said.
“Developing the UK’s domestic gas resource onshore would help provide energy security, create a significant number of new jobs in the North of England and generate substantial tax revenue.”
Shares of AJ Lucas rose 15.8% to 6.6 cents apiece at market close. The company has a market capitalization of $68.18 million.