IGas raises £20.6m

11th Feb 2011 14:54

Coal bed methane gas producer IGas Energy has raised £20.6m from a share placing at 75p a share in order to finance additional drilling following the acquisition of Nexen Exploration UK IGas jointly owns 11 UK exploration licences with Nexen Exploration and its purchase will more than double the group's contingent recoverable resource to 1,736 bcf. The rate of gas production will triple. IGas says that it will have enough recoverable gas to supply electricity to 15% of UK homes for 15 years.Nexen Exploration is the UK subsidiary of Canada-based energy supplier Nexen, which will receive 29.9% of the enlarged share capital and a seat on the board in return for selling IGas the business. IGas had £12m in the bank at the end of 2010. There will be at least two additional production wells drilled at Doe Green and the company is looking to start production at another site early in 2012. There will also be further exploration activity to turn existing resources into reserves.