Completion of Acquisition

RNS Number : 0585Q

Egdon Resources PLC

28 July 2010

 



28 July 2010                                                                                                         For Immediate Release      

EGDON RESOURCES PLC

("Egdon" or "the Company")

Completion of the Acquisition of Certain UK Assets from EnCore Oil plc

and Appointment of Director

Further to the announcement of 22 March 2010, the Directors of Egdon Resources plc are pleased to announce the completion of the acquisition of certain of EnCore Oil plc's ("EnCore") assets by Egdon ("the Acquisition"). 

The package of assets acquired comprise of EnCore's entire interest in nine onshore UK licences and an interest in the Ceres gas field in the Southern North Sea.

As consideration for the Acquisition, Egdon has issued 39,200,000 Ordinary Shares ("the Consideration Shares") to EnCore, which represent 29.998 per cent. of the enlarged share capital of the Company.  Application has been made for admission of the Consideration Shares to trading on AIM, which is expected to become effective on 29 July 2010.  The total number of Egdon Ordinary Shares in issue on admission will be 130,675,774.

Completion also triggers a number of other terms of the transaction, namely;

Lock-in Arrangements - whereby EnCore and certain of its subsidiaries have undertaken not to dispose of any Consideration Shares for a period of 12 months from the date of their admission to trading on AIM.

Non-Compete Arrangements - under which, other than by agreement, Egdon will restrict its offshore activities in the UK and EnCore will restrict its onshore operations in the UK and France to the areas adjoining their respective existing operations.

Technical Services Agreement - whereby EnCore and Egdon have agreed to provide each other with certain services  in connection with each of their businesses and the development of the Assets following the Acquisition.

Facility Agreement - under which EnCore has agreed to provide Egdon with access to an unsecured loan facility for the purpose of exploration and development activities of Egdon and its affiliates. The Facility Agreement provides a term loan facility for a period of two years in an aggregate amount equal to £1,500,000 which can be drawn down at the request of Egdon in tranches of £250,000 at an interest rate of 10% or LIBOR plus 5% if greater.

The acquisition of EnCore E&P Limited which holds the Nimes and Mairy permits in France is expected to complete later in the year.  The consideration for this will be £100,000 in cash. 

Board Appointment

EnCore have a right on completion to appoint a non-executive director to the Egdon Board for a period of five years thereafter, provided that either it holds 15 per cent. or more of the share capital of Egdon or it is the largest shareholder of the Company. 

Accordingly, we are pleased to report that Alan Booth, the Chief Executive Officer of Encore, has today been appointed as a non-executive Director of Egdon.  Prior to co-founding EnCore, Alan Booth was Chairman and Managing Director of EnCana (U.K.) Limited (now Nexen Petroleum U.K. Limited), and a member of EnCana Corporation's executive management team. He was instrumental in building EnCana UK from a new UK entrant in late 1996 with a $55 million exploration funding obligation into a significant UK production operator and the discoverer and development operator for the Buzzard field. In late 2004 Alan lead the UK team which sold EnCana (U.K.) Limited to Nexen Corporation for $2.1 billion. Prior to EnCana, Alan worked in a number of positions of increasing seniority for Amerada Hess and Oryx Energy both in the UK and overseas. He has particular experience in new ventures acquisitions and exploration in the UK, Scandinavia, Australasia as well as the Middle East and Africa.

From December 2003 until March 2005, Alan was President of the United Kingdom Offshore Operators Association (UKOOA) the representative body for all UKCS offshore operators. He also subsequently served as a Director of Oil & Gas UK and was a member of PILOT, the main forum for Government-Industry liaison chaired by the Energy Minister, as well as being a member of the Industry Leadership Team (ILT). In 2003, he was elected President of the Petroleum Exploration Society of Great Britain; in April 2004 Alan was awarded the Petroleum Group Silver Medal by the Geological Society in recognition of his contribution to the Industry. Alan's background is in geoscience and he holds a BSc in Geology from Nottingham University, and a Masters Degree in Petroleum Geology from the Royal School of Mines, Imperial College London.

Alan is a current director of industry body OGIA.

Alan Booth, aged 52, currently holds the following directorships;  EnCore Exploration Limited, EnCore Natural Resources Limited, EnCore Petroleum Limited, EnCore North Sea Limited, EnCore Oil plc, EnCore Oil and Gas Limited, EnCore (E&P) Limited, EnCore (NNS) Limited, EnCore (VOG) Limited, EnCore Gas Storage Limited, Oil and Gas Independents' Association Limited

Within the last five years, Alan Booth has held the following directorships; EnCore (SNS) Limited, Nexen Petroleum UK Holdings Limited, Petroleum Exploration Society of Great Britain Limited, United Kingdom Offshore Operators Association Limited, Oil and Gas UK Limited, RWA DEA UK EC Limited, The United Kingdom Offshore Oil and Gas Industry Association Limited

Commenting on today's announcement, Mark Abbott, Managing Director of Egdon said:

"We are pleased to report the successful completion of the acquisition of these UK assets from EnCore which provide a significant increase in our opportunity base from which to develop and grow our business over the coming years.  The assets are an excellent strategic fit with our existing portfolio and we look forward to fully integrating them into Egdon's business. Key amongst them are the Ceres gas field, an increased interest in the Kirkleatham gas development, the Biscathorpe Prospect adjacent to our Keddington oil field in Lincolnshire and an interest in two near-term exploration wells in the Weald Basin (Markwells Wood-1 and Havant-1).

I would also like to welcome Alan Booth to Egdon's Board.  Alan is a highly experienced and respected member of the UK oil and gas industry and we look forward to his input and advice in the development of Egdon's business over the coming years"

For further information please contact:

Egdon Resources plc

Mark Abbott, Managing Director                                                                        01256 702292

Buchanan Communications

Richard Darby, James Strong                                                                          020 7466 5000

Nominated Adviser and Broker - Seymour Pierce

Jonathan Wright, Richard Redmayne                                                             020 7107 8000

Notes to Authors

The Assets Acquired:

The assets acquired in relation to today's announcement are summarised in the table below and described in more detail in our release of 22 March 2010 which is available on our website (www.egdon-resources.com).

Licence	Location		Operator	Encore %	Egdon Subsidiary acquiring the Asset
ONSHORE UK
PEDL068		Cleveland	Egdon	20%	Egdon Resources U.K. Limited
PEDL098		Wessex	Northern Petroleum	7.5%	Egdon Resources U.K. Limited
PEDL125		Weald	Northern Petroleum	10%	Egdon Resources U.K. Limited
PEDL126		Weald	Northern Petroleum	10%	Egdon Resources U.K. Limited
PEDL154		Weald	Northern Petroleum	10%	Egdon Resources U.K. Limited
PEDL155		Weald	Northern Petroleum	10%	Egdon Resources U.K. Limited
PEDL256		Weald	Northern Petroleum	7.5%	Egdon Resources U.K. Limited
PEDL240		Wessex	Northern Petroleum	7.5%	Egdon Resources U.K. Limited
PEDL253		Humber	Encore	60%	Egdon Resources U.K. Limited
SOUTHERN NORTH SEA
47/9c		SNS	Venture	5%	Egdon Resources Europe Limited
47/9c		SNS	Venture	5%	Egdon Resources U.K. Limited

Egdon Resources plc

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 Europe. 

Egdon currently holds interests in thirty five licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets.  Egdon is an approved operator in both the UK and France.

Egdon has production from the Keddington and Kirklington oil fields in the East Midlands the Avington oil field in Hampshire and the Ceres gas field on the UKCS. Further oil and gas production is anticipated from Kirkleatham Eakring-Dukes Wood and Waddock Cross in 2010.

On completion of the acquisition of Encore E&P Limited, Egdon will acquire a further two permits onshore France.

Egdon has recently announced a disposal of its French subsidiary to eCORP.  This will result in two French permits being transferred from Egdon ownership on completion. 

Egdon Resources plc listed on AIM in January 2008, following the demerger of its gas storage business, Portland Gas plc (now renamed Infrastrata plc). The pre-demerged business was formed in 1997 and listed on AIM in December 2004.

www.egdon-resources.com

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 23 years experience.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

 

END

 

 

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