By Selina Williams
LONDON--U.K. utility Centrica PLC (CNA.LN) is "in advanced
talks" to buy a stake in U.K. shale gas explorer Cuadrilla
Resources Ltd.'s Bowland shale licenses in England, a person
familiar with the matter said Friday.
Cuadrilla investor AJ Lucas Group Ltd. (AJL.AU) confirmed it was
in discussions with "a number of parties" and was "confident of a
positive outcome," but didn't name any counterparties to the
talks.
If successful, the deal would be the first foray of a major
company into the U.K.'s nascent sector, underscoring the growing
interest in the country's shale gas reserves as the government
seeks to replicate the North American shale gas revolution that has
transformed the U.S. energy market.
AJ Lucas said in a statement that discussions are continuing
with a number of parties in respect of a potential farm-in or
similar type of investment in the Bowland shale prospect in
Lancashire in northwest England.
The person familiar with the matter said a potential agreement
is weeks away, rather than months away.
There has been no commercial shale gas production in the U.K. so
far and shale exploration is still at an early stage in the U.K.,
making a reliable estimate of the country's reserves difficult.
Cuadrilla estimates that the Bowland Shale holds 200 trillion
cubic feet of gas resources, but says it needs to do more work
before it can say how much of that resource is recoverable.
Cuadrilla, which is the only company using the controversial
technology to explore for shale gas onshore in the U.K., halted
fracking in May 2011 after two small seismic tremors were detected
near their operations.
Cuadrilla is owned by U.S. private equity firm Riverstone LLC
and Australian mining group AJ Lucas and management.
Write to Selina Williams at selina.williams@wsj.com; Twitter:
@selinawilliams3
