Tests of the first shale well at Cuadrilla's site in north-west England show a rich reservoir of high quality and recoverable gas, the British firm said on Wednesday, adding that rules that have constrained its testing work should be eased.
Cuadrilla is using a technique called hydraulic fracturing that involves injecting water and chemicals at high pressure to break up rock and extract gas. The practice, known as fracking, can cause tremors and environmentalists oppose the development. The company repeatedly stopped operations last year at its Preston New Road site in Lancashire because of minor seismic events. British regulations demand work be suspended if seismic activity of magnitude 0.5 or more is detected.
Cuadrilla said it could only partially test the horizontal shale well because of the operating limits.
"Nonetheless the natural gas still flowed back from the shale at a peak rate of over 200,000 standard cubic feet [scf] per day and a stable rate of some 100,000 scf/day," csaid hief executive Francis Egan.
Scaling up the results suggested a flow range of between 3 million to 8 million scf/day for a 2.5 km section once all stages were hydraulically fractured, Cuadrilla said.
"We have also confirmed that the Bowland shale formation fractures in a way that, from US experience, is typical of an excellent shale gas reservoir," Mr Egan said. Fracking techniques were pioneered in the United States, which has turned from an importer of gas to a net exporter.
Cuadrilla said more production data was needed to refine the preliminary results and this could only be done if seismicity limits are lifted to allow more effective fracturing. The firm has asked the regulator to review rules on seismic activity to allow more thorough testing of exploration wells.
On Monday, British chemical manufacturer Ineos called on the UK government to change its "unworkable" rules on gas fracking which it says could force the closure of the industry.
Depending on the outcome, Cuadrilla plans to complete fracking its first well at Preston New Road, start a second and carry out flow testing of both later this year.
Environmentalists have campaigned against the work, saying extracting more fossil fuel is at odds with Britain's commitment to reduce greenhouse gas emissions. But the government wants to cut reliance on imports of gas, which heats about 80 per cent of British homes.
The British Geological Survey estimates shale gas resources in north England could reach 1,300 trillion cubic feet (tcf), 10 per cent of which could meet Britain's demand for about 40 years.
Cuadrilla is 47.4 per cent owned by Australia's AJ Lucas and 45.2 per cent owned by a fund managed by Riverstone.
Ineos has the largest shale gas licence acreage in Britain and wants to develop the sites to cut its reliance on imported gas, which it says will dramatically reduce its costs.
"The government is shutting down shale by the backdoor and is betting the future of our manufacturing industry on windmills and imported gas," Ineos said on its website.
It said Britain must change its so-called traffic light seismicity regulations which mean fracking must be halted for 18 hours if seismic activity of magnitude 0.5 or above is detected at sites.
"Ineos calls upon the Government to either make shale workable or shut it down," Ineos said.
However, the government, which initially supported fracking to cut Britain's reliance on imports as North Sea gas supplies dry up, said earlier this year it has no plans to change the rules.
Britain currently imports around 60 per cent of its gas needs via pipelines from Norway and continental Europe and tankers of liquefied natural gas from countries including Russia and the US.
