IGas Energy (LON:IGAS) announced it has begun construction of its third well at its coal bed methane project at Doe Green near Warrington.
The move will help accelerate its programme to convert its resources into reserves and bring commercial production onstream.
The company also announced it has signed a second drilling contract, with the rig being supplied by BDF, the UK's largest onshore drilling contractor. BDF has experience of carrying out coal bed methane (CBM) drilling not only on home ground but also in Belgium and Spain.
The BDF rig has been secured for a four well programme, beginning with its third well (DG-3) at Doe Green. DG-3 is expected to spud in mid-July.
The Doe Green site, between Warrington and Widnes, has been steadily producing gas and generating electricity for over two years from a pilot well DG-2.
The DG-3 project will entail one lateral well and subsequent branches off that lateral well into a different seam to the existing producing well at DG-2. Production facilities to deal with the anticipated increased production from the site are in the process of being upgraded.
Andrew Austin, chief executive of IGas, said: "DG-3 is the first of a multi-well programme over the next nine months and marks the start of a step change in activity for IGas Energy. We have had excellent results from our pilot site at Doe Green and look forward to drilling beginning soon at DG-3. "
IGas Energy is focused production and marketing of domestically sourced gas, primarily CBM.
The company has licences to extract hydrocarbons across the north of Wales and the north of England, covering an area of 1,756km², equivalent to approximately 434,000 acres. IGas is the operator and sole owner of each of its licences.
IGas believes it is in a “unique position” that potentially offers more than 1.7 trillion cubic feet (Tcf) of technically recoverable gas - equivalent to 290 million barrels of oil - with customers located conveniently close to its operations, including the national gas network.
The company is confident it is in a strong position to secure optimum gas prices from its production and to contribute to the UK's security of supply.
CBM is just like any other form of natural gas. Its extraction involves drilling a well into virgin coal seams and pumping out water. This process lowers the pressure in the immediate area, releasing the gas that is trapped in the coal to flow to the surface.