Scottish Government Moratorium on UCG

RNS Number : 7247B

Cluff Natural Resources plc

08 October 2015

 

Cluff Natural Resources Plc / Index: AIM / Epic: CLNR / Sector: Natural Resources

8 October 2015

Cluff Natural Resources Plc ('CLNR' or 'the Company')

Scottish Government Moratorium on Underground Coal Gasification ("UCG")

The Scottish Government has today announced that it has introduced a moratorium on UCG in Scotland.  This moratorium is to allow consideration of the environmental implications of UCG, similar to the existing moratorium on onshore unconventional oil and gas which the Scottish Government put in place in January 2015. This process, which includes an independent examination of UCG and public consultation, is expected to conclude in spring 2017 and will clearly affect the timing of the development of the Company's project at Kincardine.

The Company highlighted in its interim results on 25 August 2015 that political uncertainty in Scotland around UCG and the planning process, including a motion at the SNP Party Conference calling for the inclusion of UCG in its moratorium on onshore oil and gas, would be likely to delay the development of the Kincardine Project. Accordingly a decision had already been taken to await clarity on these matters before committing to further major expenditure to support a planning application. Today's announcement by the Scottish Government justifies that decision.

CLNR is confident that the outcome of the Scottish Government's review of UCG will be consistent with the conclusions reached by the UK Government (under the then Department of Trade and Industry) following an extensive period of study from 1999 to 2009, that there would be no insurmountable technical and environmental issues associated with the construction and operation of a UCG project in the Firth of Forth. However the introduction of the moratorium means that development of the Kincardine Project and investment in UCG in Scotland will continue to be on hold at least until the moratorium is lifted.

CNR has a total of 9 UCG licences in the UK of which 6 are based in England and Wales and are therefore not subject to this moratorium. The Company remain convinced of the huge economic potential of the development of a UCG industry in the UK (highlighted by the independent economic impact assessment on UCG published by Biggar Economics in September) and the vital role UCG has to play in the diversification of the UK's energy mix and its long term security.

CLNR will continue to focus on the development of its 11 conventional gas blocks in the Southern North Sea where it is working together with Halliburton on a structure which will facilitate and accelerate the drilling of one or more wells on CLNR's licences.

A link to the full announcement made by the Scottish Government is set out below:

http://news.scotland.gov.uk/News/Moratorium-on-underground-coal-gasification-1e1a.aspx

**ENDS**

For further information please visit www.cluffnaturalresources.com or contact the following:

Cluff Natural Resources Plc	Tel: [phone]
Algy Cluff/ Graham Swindells/Andrew Nunn
Panmure Gordon (UK) Limited	Tel: [phone]
Dominic Morley / Adam James (Corporate Finance)
Tom Salvesen (Corporate Broking)
Allenby Capital Limited	Tel: [phone]
Chris Crawford / Katrina Perez (Corporate Broking)
St Brides Partners Ltd	Tel: [phone]
Felicity Winkles / Lottie Brocklehurst (Financial PR)
Charlotte Street Partners Ltd
Chris Deerin/Laura Leslie	Tel: [phone]

NOTES FOR EDITORS

Underground Coal Gasification ("UCG") Assets

·   CLNR currently holds nine UK licences for deep UCG, covering a total area of 690km².

·   The three UCG licences in Scotland are currently subject to a moratorium

·   UCG is a proven industrial process which allows coal to be converted into gas in-situ.

·   UCG provides the opportunity to unlock an indigenous energy resource which is currently stranded due to its location and due to the entrenched decline of UK's mining industry.

·   The establishment of a new UCG industry in the UK will create new employment opportunities and tax revenues, with skills requirements similar to other industries currently in decline in the UK including coal mining, oil & gas and the petrochemical industries.

·   In addition, UCG will increase UK security of energy supply by utilising indigenous resources and providing a diversification of supply.

Southern North Sea Gas Assets

In December 2014, DECC awarded CLNR five promote licences for conventional gas exploration covering a total of eleven blocks, in an emerging gas province of the Southern North Sea.

The blocks are located in an under-explored, emerging gas province of the Southern North Sea, with diverse, high-potential play fairways and trap types in both the Zechstein and the Carboniferous. Significant interest in the area has recently been rejuvenated by breakthroughs in Broadband 3-D seismic surveying which acquires high resolution images below the Permian overburden, drilling and stimulation technologies.

Notable developments in the wider area include the completion of a multi-client 3-D survey (covering CLNR block 42/1 and part of CLNR blocks 41/5 and 41/10), the Pegasus West Gas Discovery (operated by Centrica, which flowed approximately 90MMscf/day on test from Namurian reservoirs), first gas production from the Breagh Field (operated by RWE Dea, estimated to contain nearly 600bcf of recoverable gas reserves) in October 2013 and on-going development of the Cygnus Gas Field (operated by GDF Suez) where first gas production is due in 2015.

All of CLNR's blocks are located in relatively shallow water where new conventional gas discoveries can be developed quickly and regional infrastructure is in place.

 

END

 

 

MSCLLFESITLTIIE