Here’s my investigations into the company that has been given Petroleum Exploration and Development Licences covering the Forest of Dean, Somerset coast, part of Wiltshire and Dorset, and its owner and director, Gerwyn Llewellyn Williams (plus a web of other companies). Only the most dedicated will get through the whole report, so here’s the key findings (you can see how the conclusions were reached by clicking on the links and reading on).
COMPANIES AND PEOPLE
- South Western Energy Limited was founded in 2012 by Gerwyn Williams. It is based in Pyle, near Bridgend, has no website or public profile besides its records at Companies House (which show it to have negative equity).
- Electrical and mining engineer Gerwyn (originally from Maesteg/ Port Talbot area, but since the 1990s supplying addresses in Newton, Porthcawl) was involved in deep mining, and then has been involved in methane from the early 1990s.
- SW Energy’s parent is UK Onshore Gas Limited (also in negative equity, and 100% owned by Gerwyn and his wife Shelagh) [UPDATE 29/4/16, contrary to records at Companies House which show SW Energy as a wholly owned subsidiary of UKOG, South Western Energy informed Forest of Dean councillors that Transgas Limited is the parent company]
- Transgas had more than £30,000 in assets according to its last filed accounts, and along with six of Gerwyn’s 17 other companies, has Damor Investments, an offshore (Jersey) subsidiary of the Royal Bank of Canada, as a shareholder.
- UK Onshore Gas’s subsidiaries UK Methane and Coastal Oil and Gas Ltd have drilled six exploration wells and one production well in South Wales between 2008 and 2013. Most if not all of the exploration was done in partnership with Australian Eden Energy. They relinquished or didn’t complete the exploration stages of their PEDLs (granted in 2007) in Kent and the Mendips.
- UK Methane and Coastal have planning consent for another 10 wells in South Wales, but there has been no actual drilling activity at any of these sites.
- Gas Exploration Financing Limited was set up following the collapse of the partnership between UKOG and Eden Energy in 2014 to finance UKOG operations. GEF in turn is 100% owned by Infinity Energy SA, a London Stock Exchange AIM-listed oil and gas investment company (formerly Global Brands SA) which is registered in renowned tax avoidance hub Luxembourg.
- Gerwyn is CEO, majority shareholder and Infinity’s only published source of income (through a £400,000 convertible loan). Other directors in the company, Bruce Vandenburg and John Killer, regularly crop up as names involved in Gerwyn’s numerous businesses, which appear from Companies House records to be largely valueless.
- Gerwyn has publicly announced his intention to float companies in the Alternative Investments Market (AIM) on the London Stock Exchange at least twice to raise capital – including UKOG – but this has not happened.
- The Government insists Gerwyn and South Western Energy has passed all its competency tests for having the financial ability to carry out its firm commitment of at least one exploration well in the Forest of Dean, and its other licence commitments in South Wales, Somerset, Wiltshire and Dorset, including “access to sufficient resources”.
- Since July 2015, Gerwyn’s stable of companies (including South Western Energy) have been based with Guardian Global Technologies in Pyle, Bridgend. The engineering company specialises in various components used in drilling for oil and gas and the firm’s clients include (US fracking corps) Halliburton and Schlumberger. Guardian also rents fracking equipment. [There is no evidence that Gerwyn’s companies are actually working with or have any partnership agreements with Guardian… as yet]
- Guardian is funded with a mixture of Welsh Government grants and from private equity company EPI-V. This company funds one fracking company in Yorkshire (Moorlands) but focuses more on funding the service industries and infrastructure providers to the oil and gas industry, rather than the prospectors.
- In February 2016, Eden Energy gave away (for £1) all its interests in South Wales to Gerwyn and UKOG, saying there was no guarantee any petroleum would be produced. So much for all the hype since 2008!
MODUS OPERANDI: HYPE, MISSION CREEP INTO SHALE GAS EXPLORATION… SERVICES TO INDUSTRY PROFIT WHETHER THERE’S GAS OR NOT
It’s worth considering the model suggested in this US model explaining fracking as a Ponzi scheme and to consider whether it might apply here…
1. Take the best laboratory results from rock cores (from ‘appraisal boreholes’) and extrapolate them over the entire area (despite immense variation found throughout rock beds in hydrocarbon content)… Or if there are poor results they continue to hype the prospects, urging the need for more wells to be drilled.
2. Overstate valuations for the area (Valuers are usually companies with financial interests tied up in the oil and gas industry).
3. Use stages 1 and 2 to attract investors and sell shares
4. While investors directly in gas and oil prospecting often end up as losers in “pump and dump” scams (when people in the City, known as “organised pumping crews” orchestrate surges in share-buying ie pump, and then sell and scoop up profits when share prices peak, ie dump, causing share prices to plunge), the smart money is in the service industries (eg engineering firms involved in the manufacture, supply and hire of drilling and pump equipment, concrete providers, transport, legal, seismic testing, water treatment firms) – these industries are in business in well construction and operations whether any oil or gas is found in the wells or not.
- Following initial drilling operations in S Wales in 2008, after sending rock cores for analysis to RISC, a global firm based in Australia with involvement in many aspects of the oil and gas industry, Eden and Gerwyn hyped the results, claiming that “the prospective recoverable resource from just one of its drilling areas (Port Talbot) could provide heat to every home in a town the size of Maesteg for the next 670 years” and CBM could produce “methane millionaires” and be worth “billions” to South Wales, but more wells needed to be drilled to realise the full potential.
- The 2011/2012 explorations by Gerwyn/Eden, while originally aiming at CBM, also looked at shale gas. Analysis of rock cores by Texas-based RPS Group (another global corporation with tentacles across the oil and gas spectrum, including offices near Chepstow) claimed 50 trillion cubic feet of shale gas lay under South Wales, worth £120 billion – and enough recoverable gas to power the UK for 4 years. Gerwyn even claimed these extrapolated results were a vast underestimate.
- Campaigners in South Wales have discovered that there are no grounds for opposing applications for test wells on the basis they could lead to fracking, when no fracking at the initial stage is confirmed in the planning applications.
- While simultaneously arguing that there’s nothing wrong with fracking and claiming its been standard practice in the industry for 50 years, Gerwyn tends to stress in all his planning applications for exploration wells (and also a CBM production well north of Bridgend) that there will be no fracking – but will not rule it out in the future.
- Gerwyn has revealed he would rather drill on public land rather than go through the more costly and complicated procedure of getting access to private land. Natural Resources Wales, the authority which amalgamated the Forestry Commission and Environment Agency in Wales, not only gives Gerwyn the permits to go ahead, but also manages public forest in which he plans to drill. [The Government told us that public forest land (that managed by the Forestry Commission) in the Forest of Dean could be used for drilling sites]
I’ve prepared this report and timeline below to enable those who need to, to get as full a picture as possible of the man and the various companies which are or may be involved in financing and providing infrastructure, but there remain many unanswered questions:
The key unanswered question is that the investigation found nothing in the public domain which indicated funding on the scale required to drill wells, maintain and complete them (ie cap them after use). UPDATE 29/4/16: Research has revealed a Jersey-based offshoot of the Royal Bank of Canada holds shares in a number of Gerwyn’s companies, including Transgas.
What we can discern, though, is that Gerwyn likes to – as a man with many letters of engineering after his name – try to blind with science. Having had 20-plus years’ experience in the unconventional gas industry, he knows far more than anyone else!
He also has a tendency, increasingly after 2011 in South Wales, to initially state he’s looking for Coalbed Methane, but then sneak in applications to look further down for Shale Gas.
The final conclusion is… whether he gets past the planners or not… we the people will ensure no drilling operations begin.