The United Kingdom’s off again-on again fracking ban has seen Queensland-based AJ Lucas Group write down the full $157.3 million value of its UK onshore gas exploration assets.

But strong demand for its services in Australia saw the drilling and gas exploration group reported an EBITDA of $14.83 million for the six months to December 31, 2022, up 37.3 per cent on the same period in 2021.

Liz Truss lifted the moratorium on hydraulic fracturing during her short stint as UK Prime Minister, but her replacement Rishi Sunak reimposed that ban in October.

Lucas said that, in light of the volatile environment, it had reviewed the carrying value of its investment in UK exploration assets and recorded a non-cash impairment expense of $157.3 million.

“In the UK, we will continue to pursue strategies to encourage the removal of the moratorium on shale gas exploration and thus allow us the opportunity to develop our licences,” Lucas chief executive officer Brett Tredinnick said.

“We remain resolute in our view that shale gas has an important role to play as a potential transition fuel as the United Kingdom moves towards its net zero target by 2050.”

In Australia, the group plans to continue to seek opportunities to grow revenue on the back of continued strong demand for Australian metallurgical coal.

“Our drilling business continues to go from strength to strength, with the first half results reflecting the operation’s ability to grow revenue and earnings when we have the opportunity to do so,” Mr Tredinnick said.

“Our fleet, our people, our brand and our expertise are second-to-none in the industry.

“The demand for metallurgical (or coking) coal, which is a crucial driver of demand for the group’s drilling services, remains high by historical standards and the outlook remains strong.

“Given this outlook, and the demand from our clients for more and broader services, the group continues to look for opportunities to grow and diversify its drilling business in a capital-efficient manner.

“We are moving into the second half with a high level of confidence that we have the underlying performance and cash flows to resolve a range of legacy issues, including our high debt load and the future of our UK assets.”