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IGas to Drill as Many as 2 More U.K. Shale Wells This Year

Jan. 23 (Bloomberg) -- IGas Energy Plc plans to drill as many as two more exploratory shale wells in the U.K. this year, subject to permitting, its chief executive officer said.

The company is already drilling at its Barton site near Manchester in northwest England where it expects to complete initial work by the end of the quarter, Andrew Austin said today in an interview at the company’s office in London. It plans to flow-test a well before the end of the year, he said.

The U.K. has promised tax breaks for drillers as it tries to kick-start the industry that it says will stimulate the economy, add jobs, and cut reliance on imported fuel amid declining North Sea reserves. The government will open up new areas in the next onshore licensing round, due in early summer.

IGas expects to bid for more licenses in this 14th round, said the 48-year-old Austin, without elaborating. He’s encouraged by the “commitment of the majors” to the industry in the U.K., he said.

IGas shares fell 4.9 percent, the biggest decline in three months, to close at 141.25 pence in London trading.

This month, Total SA of France agreed to buy a 40 percent stake in the Gainsborough Trough in eastern England in which IGas has a 14.5 percent holding. Last year, GDF Suez SA and Centrica Plc purchased shares in licenses in the Bowland Basin, an area estimated to hold 1,300 trillion cubic feet of gas, enough to meet demand for almost five decades if just 10 percent is extracted.

Commercial production of shale gas from sites across the U.K. is likely in three years, Austin said in an interview in May.

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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