Reabold Resources (AIM:RBD) told investors that a new British data centre covenant, announced in the UK Government's Budget this week, bolsters the case for its proposed gas-to-compute project at West Newton.
The AIM-listed oil and gas investment company, which develops strategic gas projects for European energy security, said the covenant supports on-site power generation for data centres that invest locally, create jobs and protect water supplies, allowing them to build their own generation while awaiting grid connections.
Reabold's plan would use gas produced directly from its West Newton field in East Yorkshire to power on-site generation for a co-located data centre, bypassing the UK gas grid entirely.
The company said gas supplied directly from the field could come at a substantially lower cost than grid-purchased gas, improving the data centre project's economics.
Reabold confirmed a feasibility study into the co-location concept remains underway, as announced on 9 September.
"We believe that our direct supply model at West Newton is unique in the UK and could support the development of domestic computing capacity without adding to demand on an already constrained gas supply system," said Stephen Williams, Reabold's co-chief executive.
Read more about Reabold Resources
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Reabold holds a 69.9% economic interest in the West Newton licence through its 79.8% stake in Rathlin Energy and a direct 16.665% licence interest, ahead of a recompletion, stimulation and testing programme at the field's A-2 well.
Williams said Reabold looks forward to sharing the feasibility study's results "in the near future" as it progresses the opportunity to unlock further value from West Newton.