Cuadrilla glosses over loss-making year and is optimistic for the future

 
Oliver Gill
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Views of the Cuadrilla Fracking Site At Balcombe
Revenues from hiring out rigs dried up in 2015 for Cuadrilla (Source: Getty)

Shale gas explorer Cuadrilla​ burnt through $10m (£8m) of cash last year and was forced to go cap in hand to its shareholders after revenues almost completely dried up.

Britain's largest fracking company reported a bottom-line loss of $18m, worse than the $11m reported in the previous year.

Shareholders stumped up $4m of cash in order to partially plug the gap and the company dipped into dwindling cash reserves to fund the remainder of the $10m net cash outflow.

Read more: Cuadrilla launches fracking appeal

Revenues flopped from $5m to just $219,000. This was due to Cuadrilla being unable to hire out its drilling rig to fellow shale explorers IGas and Third Energy for their own operations.

Chief exec Francis Egan glossed over the 2015 financial performance and instead chose to focus on the news that Cuadrilla has been given the go-ahead to drill its controversial exploration wells at Preston New Road in Lancashire and was hopeful for a similar decision in the months to come at another site in Roseacre Wood.

"We are now focussed on ensuring that planning conditions are discharged smoothly and plan to begin site build towards the end of the year," Egan said Cuadrilla's annual report.

"The year ahead will be a pivotal and exciting one for Cuadrilla. Assessing the commercial viability of shale gas production in the UK is a national imperative."

Read more: Frack yeah: More shale gas licences for Ineos and Cuadrilla

Cuadrilla described itself as "debt free and financed by its shareholders". AJ Lucas and Riverstone both own 45 per cent of the company's shares, with the remaining 10 per cent owned by the management team and other employees.

The $4m of extra funding takes the form of cumulative preference shares and takes the total amount in this share class to $140m. Unlike tradition ordinary shares, interest of eight per cent is payable on them, similar to a debt-like instrument. However, instead of the interest being paid in cash it is added to – or rolled up onto – the total capital balance outstanding.

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