French giant Total has become the first oil major to invest in UK fracking after unveiling a farm-out deal with operator Dart Energy.
The new agreement will see Total’s exploration and production arm already one of the largest oil and gas players in the UK North Sea take on a 40% interest in licence areas south east of Doncaster.
Underground shale gas reserves in the Gainsborough Trough, in north Lincolnshire, are expected to require the use of the controversial hydraulic fracturing technique, though a full programme of surveys will now be carried out.
Dart said Total would pay $1.6m for its share of back costs, and would earn its stake in the licence area in return for funding a planned work programme costing up to $46.5m.
The move comes just weeks after Dart announced a strategic alliance and farm-out deal with GDF Suez over a further 13 of its UK licence areas, and amid growing investor interest in unconventional gas.
The company also awaits the start of the public inquiry into its plans to develop coalbed methane assets in Central Scotland, centred on Airth in Stirlingshire.
Dart chief executive John McGoldrick said he was delighted with yesterday’s (MON) agreement, which would enable full testing of the underground resource at the Lincolnshire prospect.
He said the deal would contribute to an “extensive” shale gas programme over the next “two to three years”, with expenditure topping $80m and up to six shale wells scheduled.