Energy firm Crogga has been accredited as a licensed operator in the UK - and is planning to drill a test well off the coast of Blackpool next year.

Crogga is expected to hear later this month whether it can vary the conditions of its licence so it can drill an exploratory well in Manx waters without first doing a 3D seismic survey.

The firm believes the Crogga gas field, off the coast of Maughold, could generate £2.8bn in revenue and royalties for the Manx Treasury.

But in a letter to shareholders, chief executive officer Richard Hubbard admitted that the company has ‘lacked credibility’ with the Department of Infrastructure.

‘We decided that the best way for Crogga to gain credibility in DoI’s eyes was to qualify as licence operator in the UK.’

The company and its Crogga UK subsidiary say they have now achieved international standard accreditation with the North Sea Transition Authority (NSTA) following a three-month due diligence process.

‘This is from an organisation that is recognised as probably the most highly respected regulatory authority of oil, gas and carbon capture operations in the world,’ Crogga said in a statement.

NSTA has also approved the assignment of a licence containing the undeveloped Ronaldsway gas field to Crogga UK which has purchased the block from Burgate Exploration and Production Ltd.

Despite its name, the Ronaldsway gas field is actually much closer to the UK coast.

Crogga says it plans to drill the Ronaldsway appraisal well late in 2025 and then, subject to international-standard drilling regulations being enacted in the Isle of Man, to then move the rig to drill the Independence test well in Manx waters in 2026.

Three60 has been appointed well operator.

Crogga says there are significant technical and operational synergies between the Ronaldsway and Independence wells. ‘They share an almost identical drilling and testing programme as well as delivering logistical and cost benefits by drilling a two-well programme,’ it said.

The company has also set up Crogga Renewables as a first step on its ambitions to become involved in onshore wind, solar and biogas projects in the island and across.

Mr Hubbard said in his letter to shareholders: ‘Since we closed the rights issue at the end of May with £987,738 kindly invested by yourselves to keep the company afloat, we have been in overdrive to push the company forward.

‘I want to be straightforward with you when saying that Crogga has lacked credibility as a licence operator for an important state asset within DoI and as far as I can tell, it has been that way since the production licence was issued in 2018.

‘It has taken the current board two years to get to our current level of standing within IoM and we are not there yet. The first glimpses of support are now coming from our DoI facilitated discussions with Orsted re co-location of the Manx gas field and offshore wind farm.’

‘Crogga has felt like a genuine ground floor start-up operating from somebody’s garage.’

Mr Hubbard said the board has now made some progress with DoI over its plans for the Crogga gas field.

But he said that six years on from the production licence being issued, Tynwald has still not enacted the necessary regulations to allow drilling to start.

He added: ‘Indeed, in my opinion, I don’t think DoI ever intended to enact drilling regs as they assumed Crogga would never drill. Having regulations in place before spending more than seed money is an essential golden rule in the industry.’

The chief executive said the board had returned £1.5m to subscribers in June last year ‘when it became clear that DoI Minister Thomas had no intention of allowing Crogga to drill in 2023’.

‘How he justified losing the economic opportunity for the IoM, I have no idea,’ he said.

Mr Hubbard urged shareholders to lobby their MHK over the island’s lack of drilling regs.

‘It seems bizarre that Tynwald allowed DoI to issue a full production licence in 2018 without drilling and production regs in place and it is essential they now do so without further delay to Crogga,’ he said.

‘This is the moment for the IoM to drill the Independence well to find out whether or not it owns a valuable Manx gas field.’