Shares in IGas have jumped this morning, after the announcement of its £30m shale gas deal with Switzerland's Ineos, which will give the latter access to IGas shale sites in the north west and East Midlands regions of England.
IGas, the UK's biggest shale gas explorer, saw its share price jump 23 per cent at 30 pence per share today. Shares in the firm have shed around 16 per cent this year amid uncertainty around UK shale gas legislation.
The deal means Ineos will invest up to £138m in the development of IGas's shale gas sites across the UK. Earlier deals with French firms Total and GDF Suez means total partner investment is now $285m (£189m).
This is good news for IGas which, like its competitors, has come under pressure from the global commodity rout. Oil prices have shed around 50 per cent since June last year, and they fell to just $45 per barrel in mid-January.
"Alongside the commitment from our existing partners, INEOS's commitment of upfront cash and considerable capital investment will help fund us through the next steps of our shale appraisal and production programme," Andrew Austin, chief executive of IGas, said.
"This transaction, together with our existing partnerships with Total and GDF, reinforces the potential and materiality of our portfolio to world class counter-parties and strongly positions us as we seek to work together to unlock the potential of our untapped natural gas resources in Britain."
Ineos gave an optimistic outlook for the UK's shale gas industry today, saying it would drive economic growth.
"INEOS believes that an indigenous Shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly," Gary Haywood, chief executive of INEOS Upstream, said.