IGas Energy (LON:IGAS), the UK gas producer that specialises in developing some of the country’s unconventional gas resources, has launched drilling operations at Keele University Science Park in North Staffordshire. Drilling work is taking place on IGas’s 563 sq km Swallowcroft acreage, which comprises five licences in which it holds a 35% interest and one other licence where it hold a 100% stake. The work at Swallowcroft represents IGas’s second major production effort following work on licences at Doe Green near Warrington in north-west England, where a gas well has been on long-term test production for the past year.

The latest well was spudded on June 11 and is expected to produce gas from a lateral in the Great Row coal seam which is at a depth of around 1,757 feet from the surface and is around 11 feet thick. Following completion of the well and de-watering, a long term production test will be carried out using IGas's production testing equipment. Independent gas in place figures for Swallowcroft currently stand at 75 billion cubic feet. Logs from IGas’s well at Willoughbridge, 5.5 miles south west of this well, have shown encouraging results as to the permeability of the coals in the area.

IGas’s chief executive, Andrew Austin, said: “These licences in Staffordshire have always been an area of great interest to IGas and we look forward to seeing the productive capacity of these coals. Increased concerns over security of energy supply and the harshest winter for some 40 years in the UK has highlighted the need for the UK to produce more of its own gas resources. IGas has the funding, the know-how and the resource base to deliver secure gas commercially to industrial customers in the UK. We are on track to establish our first full UK gas production site in 2011.”

During 2009, IGas concentrated its efforts on work in north-west England while ‘farming up’ its interests in core licences around the UK. The company’s mid-case gas in place figures were increased through the year by 76% to 3.82 trillion cubic feet (Tcf) with a high-case coalbed methane contingent recoverable resource currently at 1.18 Tcf. Revenues from the Doe Green test production were £0.8m while overall losses came in at £0.5m. Two fundraisings during the year earned it £17.21m in order to pay for the farm-ups and secure…

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