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Egdon is our best way to play the UK shale gas industry
Thursday 13 Oct 2016 Author: Tom Sieber

The UK Government has overridden local county council objections to sanction fracking in Lancashire. In doing so, investors are once again interested in stocks with exposure to the nascent UK shale gas industry.

Among UK-quoted stocks, IGas Energy (IGAS:AIM) offers the purest exposure but is already up 13.5% since the news (paring initial gains of 30%) to 13.62p and has balance sheet issues.

Patient investors who reckon the UK shale industry can overcome the requisite technical challenges, complex planning process and high population density issue could consider instead Egdon Resources (EDR:AIM). This company has no debt and its shares are down 15% to 14.75p since the decision was announced. VSA Capital has a price target on the stock of 38p.

Communities Secretary Sajid Javid ruled on 6 October 2016 that private operator Cuadrilla Resources can drill and frack four horizontal wells on its Preston Road site near Blackpool. Javid deferred judgement on a similar work programme at the nearby Roseacre site, saying he is ‘minded to allow’ the project if concerns over traffic can be overcome.

Egdon and IGas both have interests in the Springs Road site in Nottinghamshire. A planning decision has been delayed to 15 November 2016 after a late legal matter. (TS)

Go for Egdon.

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