UK fracking firm IGas has agreed to take over its Australian rival Dart Energy in a £117m deal that will create Britain’s largest shale gas explorer.
Announced last week, the deal is expected to conclude in September, creating a company with an equity value of almost £400m and a portfolio of 1m acres of licensed British land – land that may soon be developed for shale gas exploitation.
“The transaction further strengthens our position financially, operationally and also significantly increases our licensed acreage as we seek to unlock the untapped energy resource that exists in Britain”, said IGas chief executive Andrew Austin.
Austin added that the merger would leave IGas with around three times the potential fracking land as its competitor Cuadrilla. Assets owned by the Australian firm elsewhere, including land in Germany, India and Indonesia, will be sold.
As part of the deal, Dart’s shareholders will also take a 30.5% stake in IGas.
John McGoldrick, CEO of Dart, said the deal would enable the shareholders “to participate in the long-term value creation potential of the UK shale industry, which we consider will be one of the defining energy market stories of this century”.
The news comes as the government continues its controversial push to welcome the shale gas industry to UK shores.
Chancellor George Osborne has offered considerable tax breaks to the shale gas industry while ministers prepare plans to give companies the right to drill on private land without permission.
In a review on the potential of fracking published last week, members of the House of Lords urged the government to make shale gas exploitation a “national priority”.
Public opinion polls show that concern over the possibility of shale gas firms beginning operations in the UK is rising, while support for renewable energy has remained solid.
Environmental campaigners and representatives of the clean energy industry argue that renewables can provide safer, more sustainable, and more secure energy than fracking.
Speaking to Blue & Green Tomorrow, Renewable Energy Association head of public affairs James Court said, “Renewables are delivering today, while any potential benefits from shale gas are still some way off.
“Renewable energy is attracting investment, creating jobs, cutting costs, improving our energy security and preserving our environment.”
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