INEOS Upstream has agreed to acquire 80% stake in Petroleum Exploration and Development Licence (PEDL) 162, in the Midland Valley of Scotland, UK, from Reach Coal Seam Gas (Reach CSG).
The 400km² licence area is next to PEDL 133, in which INEOS already holds a 51% interest of the shale layer.
INEOS will operate the licence and will fund the initial appraisal activity, which features two vertical science wells and 100km² of 3D seismic.
Reach CSG has undertaken geological studies since securing PEDL 162 in 2008 and identified that it may contain vast amounts of producible hydrocarbons.
The deal is expected to be completed shortly, subject to regulatory approvals.
INEOS Upstream CEO Gary Haywood said: “I am delighted to have concluded this deal in Scotland, which is a very good fit with our existing licence interest in the adjoining PEDL 133.
“We are keen to move quickly to evaluate the potential of this resource and determine if we can economically produce gas from this area.
“I am delighted to have concluded this deal in Scotland, which is a very good fit with our existing licence interest in the adjoining PEDL 133.”
“If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in Scotland.
“Our recent commitment to share the benefits of gas production with the landowners and the community will also bring significant local benefits.”
The British Geological Survey (BGS) has found significant shale gas and oil resources in the area through the Midland Valley of Scotland.
Phase one appraisal will identify whether the resources can be economically extracted.
Specialists from Mitchell Energy, a US-based company involved in shale gas extraction, are now working with INEOS in the UK.
Image: Specialists from Mitchell Energy are working on shale gas extraction with INEOS in the UK. Photo: courtesy of INEOS.