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Shale Explorer Cuadrilla Says U.K. Production May Start in 2014

Shale-gas explorer Cuadrilla Resources expects to resume work this year and says gas production may start in 2014. Claims that 200 trillion cubic feet of shale gas “represents the low end of the range”; thickness of the Bowland shale play is between 10 to 15 times thicker than commonly found in the U.S.

Cuadrilla Resources Ltd., a U.K. shale-gas explorer that suspended drilling in northwest England after causing minor earthquakes, expects to resume work this year and said gas production may start in 2014.

“By the first quarter of 2013, we will be far enough along in the exploration program to say this makes sense to go ahead and apply for a full field development permit,” Cuadrilla Chief Executive Officer Mark Miller said in an interview. “Production could be under way as early as 2014.”

Cuadrilla, which says it’s found more natural gas trapped in the local shale rock than Iraq has in its entire reserves, plans to pursue hydraulic fracturing in three wells by the end of this year. Photographer: Paul Thomas/Bloomberg

Cuadrilla, which says it’s found more natural gas trapped in the local shale rock than Iraq has in its entire reserves, plans to pursue hydraulic fracturing in three wells by the end of this year. The program hinges on getting final approval from Britain’s energy department, which called for an assessment of fracking after two tremors in the area last year.

Fracking, as the process is known, uses water, sand and chemicals to open fissures and has made the U.S. the world’s largest natural-gas producer. European nations have hesitated to endorse the technique because of concerns it may pollute water. France and Bulgaria have banned the practice.

“It’s very important that nobody gets it wrong in Europe,” Miller said. “We have to do this job right and demonstrate that it’s safe, environmentally sound and commercially viable.”

Cuadrilla, which also holds licenses in Poland and the Czech Republic, is privately held and backed by private equity group Riverstone Holdings LLC and Australia’s AJ Lucas Group. (AJL) Its directors include former BP Plc CEO John Browne.

Move from U.S.

Miller was invited to join Lichfield, England-based Cuadrilla in 2007 and two years later moved to the U.K. from the U.S. where he had spent more than 20 years running a well- testing company. Prior to that he worked at oil services company Schlumberger Ltd.

Cuadrilla’s estimate that the shale it’s exploring may contain 200 trillion cubic feet of gas “represents the low end of the range,” he said. While only a fraction of that gas could be pumped, the deposits could add significantly to the U.K.’s proven, recoverable reserves of 9 trillion cubic feet.

The thickness of the shale in the region Cuadrilla is exploring is between 3,000 and 4,000 feet (1,220 meters), 10 to 15 times thicker than commonly found in the U.S., he said. What fraction can be recovered will depend on the number and location of production wells drilled in the area, he added.

“It’s a game changer if we can show that it works,” Miller said.

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