Oil and gas firm Cuadrilla has started exploration activities at a fracking site in Lancashire, north-west England.
The firm has is drilling a pilot well at the Preston New Road site in a bid to determine the best locations for the extraction of shale gas in the area.
The pilot well will be around 3500 m deep. Two horizontal wells will also be drilled to enable Cuadrilla to test the flow rates of natural gas locked in the rock formations and determine how much natural gas could be commercially extracted.
A second pilot well will also be drilled at another site in Lancashire.
The commencement of drilling has triggered an initial £100 000 payment by Cuadrilla into a local community benefit fund.
Under a Community Engagement Charter established by trade body UK Onshore Oil and Gas (UKOOG), local communities are set to receive £100 000 for sites that host exploration wells where hydraulic fracturing takes place and one per cent of revenue for those sites that produce commercial quantities of gas.
Current estimates show that for the first 400 commercial sites, communities would receive approximately £800 million directly and local authorities would receive more than this through business rates, UKOOG said.
