Shale Gas Drilling Firms Planning Pounds 6.5m Flotation on Stock Market; CAMPAIGNERS CALL FOR BAN UNTIL FULL RISKS ARE KNOWN
Byline: PETER COLLINS
THE firms behind controversial shale gas drilling plans in Wales are hoping to raise millions of pounds for the project through a stock market flotation.
Bridgend-based Coastal Oil Gas and its Australian partners Eden Energy aim to raise $10m (pounds 6.5m) by floating on the Australian Stock Exchange. The announcement comes just months after it was estimated there could be enough shale gas trapped beneath a vast swathe of South Wales to power the UK for four years.
The gas-field was described by Eden Energy's Perth-based chairman Greg Soloman as potentially "colossal". If the company's estimate is proven to be accurate, the value could be as high as pounds 70bn.
The companies hold rights to exploit gas reserves spanning 510,000 acres in South Wales, Bristol and Kent.
The public float is a step towards the firms' ambitions to create a "world class" industry in South Wales that could create new jobs.
There are fears, however, about the potential impact of fracking, the highly controversial process to extract the gas from thousands of feet underground.
Local politicians and campaigners opposing plans to test drill in Llandow Industrial Estate, in the Vale of Glamorgan, have highlighted claims that fracking has caused water contamination in the US.
In a statement, Eden Energy said it was launching a "spin out" its wholly owned UK coal seam methane/shale gas subsidiary into a new company called Adamo Energy Ltd as soon as market conditions are deemed are suitable.
The proposal involves raising $10m capital, with Eden Energy shareholders offered priority entitlement.
Stockmarket traders reacted to the announcement, saying it was likely to be add "significant value" to Eden's share price over the next year.
However, the move last night prompted fresh calls for moratorium on fracking operations in the UK until safety concerns have been addressed.
Huw Irranca-Davies, Shadow Energy Minister, said: "This is a natural market move by the company. But the potential identified by Eden Energy requires a coherent UK response and reinforces calls for a moratorium and for this new technique to be part of a UK energy policy framework. …