Alkane Looking for Partners Before Drilling for U.K. Shale Gas

Alkane Energy Plc (ALK), the U.K. producer of electricity from coal-mine methane, is on the hunt for partners to explore for shale gas at its licenses in central and northern England.

“We’re starting conversations,” Chief Executive Officer Neil O’Brien said today in an interview in London, declining to name the potential investors. “We’re talking to people about how to extract value from our licenses.”

The U.K. government is preparing tax breaks for shale drillers as it seeks to cut reliance on imports and replace depleted North Sea reserves. It said last month shale rocks in the Bowland Basin, which extends from the east to the northwest, may hold as much as 1,300 trillion cubic feet of gas. A recovery rate of 10 percent -- similar to fields in the U.S. -- would give the U.K. enough gas to meet demand for about 47 years.

Alkane had estimated its licenses in Yorkshire and Nottinghamshire, part of the Bowland, hold 2 trillion cubic feet of gas, O’Brien said. Following the latest estimates last month, that could be revised up, he said.

Alkane shares have risen 49 percent this year to their highest price since 2006. The company is based in Nottinghamshire.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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