Swallowcroft in Staffordshire offers a very intensively located resource with a large number of potentially drillable seams within the coal. We have now completed the well at Keele science park in PEDL 56-1 and are carrying out pilot production. In addition in 2009 we acquired PEDL 78-2 and now own 100% of this licence, which we operate. The GIIP on this licence was independently assessed as 78 bcf mid case.

The Swallowcroft area includes PEDLs 40-1, 56-1, 78-1, 78-2, 115-1 and 115-2. The area extends from Newcastle-under-Lyme in the West across to Lichfield in the East and towards Telford in the South, all within the county of Staffordshire.

Swallowcroft Central (PEDLs 40-1 and 56-1): Geologically, the area is formed by a series of open, westward-plunging anticlines and synclines, with rocks of Triassic to Carboniferous age outcropping at surface and with the Carboniferous Westphalian coal measures sequence outcropping to the north of the licences; where they were worked as part of the Staffordshire coalfields. A large fault, the Wem Fault, downthrows Carboniferous strata to the very westerly edge of the licences and although quantification of this throw is uncertain, it is likely that the Carboniferous strata to the west of this fault are too deep for CBM exploration at present. There are no commitments outstanding relating to the Central Swallowcroft licences, which are now both in their second terms.

Greater Swallowcroft (PEDLs 78-1, 78-2 and 115-1, 115-2): Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic age. Solid geological maps show the area other than PEDL 78-2 to be generally dipping from south to north.

Extensive work has now been undertaken to select appropriate sites from which to drill, using the Group’s existing geological data. In July 2008, a well was spudded at Willoughbridge in PEDL 78-1. The drilling of this well satisfies the commitments under the first term of the licence and extends both PEDLs 78-1 and 78-2 into their second terms. A well was spudded at Fradley in October 2008 and this fulfilled the licence obligations for PEDL 115-2 and ensures the extension of both PEDLs 115-1 and 115-2 into their second terms.

In PEDL 56-1, under an agreement struck with Keele University, a pilot production site has been established at the Keele science park and is currently on production test. The university is a potential customer for gas produced from this site.

PEDL 78-2 was acquired 100% by IGas Energy in June 2009 and is operated by the Company.

In March 2010 IGas Energy was granted an unconditional FDP covering part of the Swallowcroft area, permitting commercial gas production and further securing licence interests.