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UK Goes a Step Ahead in Shale Gas to Counter North Sea Fall
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The UK took another step toward fracking on Monday, when North Yorkshire county council's planning committee approved of a shale gas fracking application. Councilors at the aforementioned body voted in favour of the application 7 to 4 after two days of hearing.
The application was put forward by energy company Third Energy for its site at Kirby Misperton. Barclay's Global Natural Resources Investments owns a 97% stake at Third Energy. The tilt toward fracking in the face of steep public opposition comes on the heels of steadily declining North Sea output.
Trouble at the North Sea stemming from media speculation on another round of job cuts was compounded by major energy players’ plans to exit the area. Integrated energy major, Royal Dutch Shell plc is moving ahead to divest its North Sea properties. The primary reason for specifically considering the North Sea asset sale is that operating cost is high there. Given the prolonged weakness in oil and gas prices, operating in the North Sea is proving difficult for energy players.
Reversal for Environmentalists
The decision must have dealt a blow to environmentalists who rejoiced last year when local government officials in Lancashire rejected two permits to shale gas firm Cuadrilla Resources. The company subsequently appealed against the decision which forced the government to make the rules friendlier for shale gas projects. If the matter, which is still pending approval, gets the green light, we may see the delivery of first shale gas from Cuadrilla’s wells by mid-2017.
Fracking: Bone of Contention
Hydraulic fracturing, commonly known as fracking, is a process by which water, sand and chemicals are pumped into a well for extraction of oil or gas. However this process – which poses hazards to health – is highly debated by environmentalists. Energy companies already suffering from losses due to low oil prices are obviously against these rules.
Conclusion
With the positive move toward fracking amid concerns, the case for companies with substantial positions in the North Sea requires close monitoring. Accordingly, a smart strategy to adopt now would be to identify stocks that are profoundly influenced by any change in the North Sea, including large-cap firms such as BP Plc (BP - Free Report) , ConocoPhillips (COP - Free Report) and Eni SpA (E - Free Report) .
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UK Goes a Step Ahead in Shale Gas to Counter North Sea Fall
The UK took another step toward fracking on Monday, when North Yorkshire county council's planning committee approved of a shale gas fracking application. Councilors at the aforementioned body voted in favour of the application 7 to 4 after two days of hearing.
The application was put forward by energy company Third Energy for its site at Kirby Misperton. Barclay's Global Natural Resources Investments owns a 97% stake at Third Energy. The tilt toward fracking in the face of steep public opposition comes on the heels of steadily declining North Sea output.
Trouble at the North Sea stemming from media speculation on another round of job cuts was compounded by major energy players’ plans to exit the area. Integrated energy major, Royal Dutch Shell plc is moving ahead to divest its North Sea properties. The primary reason for specifically considering the North Sea asset sale is that operating cost is high there. Given the prolonged weakness in oil and gas prices, operating in the North Sea is proving difficult for energy players.
Reversal for Environmentalists
The decision must have dealt a blow to environmentalists who rejoiced last year when local government officials in Lancashire rejected two permits to shale gas firm Cuadrilla Resources. The company subsequently appealed against the decision which forced the government to make the rules friendlier for shale gas projects. If the matter, which is still pending approval, gets the green light, we may see the delivery of first shale gas from Cuadrilla’s wells by mid-2017.
Fracking: Bone of Contention
Hydraulic fracturing, commonly known as fracking, is a process by which water, sand and chemicals are pumped into a well for extraction of oil or gas. However this process – which poses hazards to health – is highly debated by environmentalists. Energy companies already suffering from losses due to low oil prices are obviously against these rules.
Conclusion
With the positive move toward fracking amid concerns, the case for companies with substantial positions in the North Sea requires close monitoring. Accordingly, a smart strategy to adopt now would be to identify stocks that are profoundly influenced by any change in the North Sea, including large-cap firms such as BP Plc (BP - Free Report) , ConocoPhillips (COP - Free Report) and Eni SpA (E - Free Report) .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>