E gas player IGas was boosted yesterday after announcing it is to sell stakes in seven of its licences in the north west of England to chemicals giant Ineos.
Shares in the company closed up 15.62 per cent yesterday, after the deal was announced.
Ineos is acquiring at least a 50 per cent interest in the licences, along with the option to purchase a 20 per cent interest in two further IGas shale gas licences in the east midlands.
The agreement also sees Ineos purchase IGas’ interest in the shale gas licence around Grangemouth in Scotland, giving it 100 per cent ownership of the asset.
The firm will pay IGas £30m in cash and has agreed to fund a two-phase work programme of up to £138m to appraise and develop the sites it has bought into.
Gary Haywood, Ineos Upstream chief executive, said the deal represented a “further significant step for Ineos in its plan to become the biggest player in the UK shale gas industry.
“We believe shale gas could revolutionise UK manufacturing and Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards for UK shale gas to be successfully developed,” he added.
According to IGas, the deal means that the company will now have up to $285m (£189m) of total spend from its major partners, including Total and GDF Suez, on its “key shale gas acreage”.
Andrew Auston, IGas chief executive, said the commitment of “upfront cash and considerable capital investment” from Ineos will help to fund the company through the next steps of its shale appraisal and production programme.
“This transaction… strongly positions us as we seek to work together to unlock the potential of our untapped natural gas resources in Britain,” he added.