Acquisition of additional interest in PEDL068

RNS Number : 7217H

Egdon Resources PLC

22 August 2016

 

                                                                                                                                          22 August 2016

EGDON RESOURCES PLC

("Egdon" or "the Company")

Acquisition of additional interest in PEDL068

Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement to acquire an additional 20% interest in Petroleum Exploration and Production Licence PEDL068 from DESS Energy Limited ("DESS") bringing our total interest to 68%.  Egdon is operator of PEDL068 which is located in the Cleveland Basin of North Yorkshire.  This transaction follows DESS' acquisition of Sterling Resources (UK) Limited's 47% interest in the licence.

As consideration for this acquisition, Egdon will bear DESS's retained 20% share of ongoing expenditure for the next six months and in addition will accept liability for DESS's 20% share of the existing abandonment liability for the Kirkleatham site and Kirkleatham-1 well, but not for any future works. Egdon estimate that this transaction will add approximately 1.75 bcf of Best Estimate Contingent and Prospective Conventional Resources to its portfolio. 

Under a separate transaction, DESS has also sold a 5% interest to existing PEDL068 partner Montrose Industries Limited.

The acquisition is subject to approval by the Oil and Gas Authority ("OGA"). On completion of these transactions the interests in PEDL068 will be as follows:

Egdon Resources U.K. Limited                                       60.00%

DESS Energy Limited                                                         22.00%

Yorkshire Exploration Limited*                                           8.00%                 

Montrose Industries Limited                                             10.00%

*wholly owned subsidiary of Egdon Resources

Licence PEDL068, is located in the Cleveland Basin of North Yorkshire and contains the Kirkleatham gas field, which is shut-in pending the potential drilling of a side-track well to target an un-drained portion of the field up-dip from the existing producer well.  Planning consent has recently been extended for Kirkleatham and allows for drilling and production from a further two wells at the site. The licence also contains the Westerdale/Ralph Cross gas discovery where planning consent is in place for an appraisal well. Exploration in PEDL068 to date has concentrated on Permian age limestone gas plays but the licence also contains prospectivity in deeper Carboniferous age sandstones.

Commenting on the acquisition, Mark Abbott, Managing Director of Egdon said:

 "This acquisition builds on our existing interest in PEDL068, adding additional resource potential  to the Company at low cost and complements our pending award of surrounding licence PEDL259 in the 14th Onshore Licensing Round in what was a highly sought after region."

For further information please contact:

Egdon Resources plc

Mark Abbott                                                                              01256 702 292

Buchanan

Richard Darby, Anna Michniewicz                                               020 7466 5000

Nominated Adviser and Broker - Cantor Fitzgerald Europe

David Porter, Sarah Wharry (Corporate Finance)                           020 7894 7000

Mark Westcott (Sales)

Joint Broker - VSA Capital Limited

Andrew Monk (Corporate Broking)                                               020 3005 5000

Andrew Raca (Corporate Finance)

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 26 years' experience.

Evaluation of potential recoverable hydrocarbons has been assessed in accordance with 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).

Notes to Editors:

Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK and France.

In November 2014, Egdon acquired the entire issued share capital of Yorkshire Exploration Limited ("YEL").  YEL is a private company, which holds an 8% interest in Petroleum Exploration and Production Licence PEDL068.

Egdon currently holds interests in thirty six licences in the UK and France and is awaiting the issue of a further nine new UK licences in the 14^th Round.  The Company has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets and is an approved operator in both the UK and France.

Egdon was formed in 1997 and listed on AIM in December 2004.

 

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