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High end of IGas Energy shale gas potential estimates reach 170 tcf

According to a new study by IGas Energy plc, the company’s licensed acreage northwest of England may hold up to 170 trillion cubic feet of shale gas.

The UK-based onshore hydrocarbons producer released results of its study of the Lower Carboniferous shale, including the Bowland Shale, under its 100% owned licenses in the North West of England, an area of 300 square miles.

IGas has constructed a geological model utilizing 330 kms of reprocessed seismic lines, subsurface data (including cores, logs) from ca. 20 offset wells and geological data from IGas’s well at Ince Marshes. This data has been analyzed to give estimates of the reservoir characteristics of the shale formations and the thickness of the shale.

These estimates cover an area of 300 square miles giving an average mid case in place volume of ca. 340 Bcf/ square mile with a range of 93 Bcf/square mile to 677 Bcf/square mile across the IGas North West acreage.

The study, said Andrew Austin, IGas Energy’s CEO , “supports our view that these licenses have a very significant Shale Gas resource with the potential to transform the company and materially benefit the communities in which we operate.”

The company plans to begin its drilling program later this year with the goal of refining the study’s estimates and advancing the company’s understanding of the shale basin.

Caution
In a research note Monday, energy analysts at Jefferies International cautioned that the range of gas in place estimates (between 15 tcf and 170 tcf) is large and that numerous technical and commercial variables still exist.

And, while the UK conditionally lifted its ban on shale gas development in December 2012, London-based energy research company GlobalData believes the lifting of the ban is largely irrelevant in the UK’s energy landscape, due in part to the same uncertainties highlighted by Jefferies.

“Firstly, there is significant volume uncertainty and the UK’s shale gas reserves are currently unknown,” said GlobalData's Jonathan Lane in December following the UK government's Dec. 13 decision to permit the resumption of shale gas exploration. "Secondly, the cost of production is also uncertain, and geological differences mean that we cannot estimate UK production costs based on those of the US."

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