Lancashire Operations Status Report, 28 June 2011

June 28, 2011

Cuadrilla Resources has voluntarily decided to postpone its hydraulic fracturing operations at Preese Hall 1 following small tremors located close to the site on 1 April and 27 May 2011. This decision has the agreement of the Department of Energy and Climate Change (DECC).

Cuadrilla is producing a detailed geo-mechanical report for DECC. The report will focus on whether there are links between the seismic events and the hydraulic fracturing process and what can be done to mitigate against any risks should a connection be proven. This report will take up to eight weeks to produce – possibly longer – depending upon the availability of qualified technical experts to undertake the work involved.

At present no proven link between the seismic events and the hydraulic fracturing has been established but Cuadrilla Resources consider the decision to postpone as being a prudent and responsible response. Hydraulic fracturing will not recommence until discussions are satisfactorily concluded with the regulatory authorities.

The intensity of the tremors is well below anything that could be realistically considered as an earthquake with any meaningful or tangible local impact. The tremors have not led to any recorded structural damage or physical injury and the British Geological Survey describes these tremors in a statement as “pretty insignificant even by UK standards”.

Contrary to some misreporting in the media, drilling operations are not affected as no link has been suggested between drilling and seismic activity. Therefore the Grange Hill site is still active. Plans to drill at a site near Becconsall, between Preston and Southport are progressing and public consultation is already underway with the local community and officials. A community consultation event attended by over 100 local people took place on 6 June.

Cuadrilla is investing in more seismic monitoring equipment for the operations to enhance the coverage already supplied by the British Geological Survey which was installed after the 1 April event at Cuadrilla’s request.

Cuadrilla remains certain that its operations are completely safe for people, property and the environment.