Scotland business

Shale gas explorer IGas in North Sea move

Drilling site
Image caption IGas is one of the few UK companies licensed for shale gas exploration

Shale gas explorer IGas has agreed to buy North Sea producer Caithness Oil in an all-paper deal worth almost £9m.

Under the terms of the proposed deal, IGas will buy Caithness Oil's interests in licences in the Inner Moray Firth, including the Lybster field.

Lybster was discovered in 1996 by Premier Oil and put into production in May 2012.

It was producing about 200 barrels of oil a day and some gas before being temporarily shut for routine work.

The oil there is transported and sold to facilities at Nigg.

The agreement is subject to approval by regulators.

In a stock market announcement, IGas said the deal would increase its current production and "offer additional upside through utilisation of significant existing tax losses and monetisation of associated gas".

IGas chief executive Andrew Austin said: "I am pleased we have managed to secure this opportunity to increase our existing production and one that offers significant upside potential.

"The transaction is in line with our strategy to grow our production base in order to fund our exploration activities and to take advantage of accretive acquisition opportunities."

IGas, which employs about 160 staff, has been exploring and developing oil and gas reserves at various onshore locations in England.

In June, it said there could be up to 170 trillion cubic feet of gas in the areas it is licensed to explore in northern England.

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