Final Results for the Year Ended 31 July 2017

RNS Number : 0273V

Egdon Resources PLC

31 October 2017

 



 31 October 2017                                                                                         Embargoed for 7.00am

EGDON RESOURCES PLC

("Egdon" or "the Group" or "the Company")

Final Results for the Year Ended 31 July 2017

Egdon Resources plc (AIM: EDR), a UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK, today announces its audited results for the year ended 31 July 2017. 

Operational and Corporate Highlights

·      Successful placing and open offer to raise £5.06 million before costs in November 2016

·      Planning consent granted to operator IGas to drill up to two exploratory wells at Springs Road, North Nottinghamshire (Egdon 14.5% interest) - Egdon is carried on these initial wells

·      ERC Equipoise reported an independent assessment of the undiscovered gas initially in place ("GIIP") in ten previously unassessed licences resulting in a total mean volume of 50.9 trillion cubic feet ("TCF") of gas net to the Company

·      Issue of the Wressle Environmental Permit variations. Submission of the appeals against the January and July planning refusals which have been co-joined and will be considered at an appeal hearing in November 2017

·      Acquisition of additional interests in PEDL068, PEDL201, PEDL306 and PEDL334

·      Acquisition of a 50% interest in PEDL278 containing the Kirk Smeaton tight gas discovery and further unconventional resources potential

·      Acquisition of an additional 12% interest in PEDL209 (deep) and signature of a new option agreement with Total which, if exercised, includes a carried work programme valued at up to £4.85 million to Egdon

·      Acquisition of the Fiskerton Airfield producing oil field (EXL294) in the East Midlands for a cash consideration of US$750,000

·      Completion of the Company's exit from France

Financial Highlights

·      Oil and gas revenues during the period of £1.04 million (2016: £1.59 million)

·      Loss for the period of £1.70 million for the year ended 31 July 2017 after net write downs and impairments of £0.19 million (2016: loss of £2.69 million after net write downs and impairments of £0.72 million)

·      Basic loss per share of 0.68p (31 July 2016: basic loss per share of 1.21p)

·      Cash at bank of £6.06 million as at 31 July 2017 (31 July 2016: £2.68 million)

·      Net current assets as at 31 July 2017 of £6.40 million (31 July 2016: £4.18 million)

·      Net assets as at 31 July 2017 of £32.70 million (31 July 2016: £29.43 million)

Commenting on the results, Philip Stephens, Chairman of Egdon said;

"In a period of further progress, we were pleased to complete an equity cash raising of £5.06 million in November 2016, which has significantly strengthened our balance sheet.  An independent evaluation of the net gas in place for our unconventional resources has given a figure of 50.9 TCF, which shows an increase of 180% over the estimate made two years ago.  Our conventional resources portfolio contains a number of very attractive prospects, the value of which we are looking to progress in the next 12 to 18 months."

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 (Corporate Finance)                                                                    020 7894 7000

Joint Broker - VSA Capital Limited

Andrew Monk (Corporate Broking)                                                                   020 3005 5000

Andrew Raca (Corporate Finance)

Notes to Editors:

Egdon Resources plc (AIM: 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. 

Egdon currently holds interests in 43 licences in the UK and has an active programme of exploration, appraisal and development across its balanced portfolio of oil and gas assets.  Egdon is an approved operator in the UK.

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

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 29 years' experience.

Evaluation of hydrocarbon Reserves, Prospective and Contingent Resources and undiscovered Gas Initially In Place have 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).

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Chairman's Statement

I can report that we have continued to make progress with our strategic objectives throughout this reporting period.

Highlights have included:

Placing and Open Offer:  We substantially strengthened our balance sheet during the period through a placing and open offer which raised gross proceeds of £5.06 million enabling Egdon to pursue its stated strategy.

Springs Road Planning Award: In November 2016 Nottinghamshire County Council granted consent to develop a hydrocarbon wellsite and to drill up to two exploratory wells at Springs Road, North Nottinghamshire.  We are being carried on these potentially play opening wells in the Gainsborough Trough, our core area for unconventional resources exploration, during 2018.

Growing our Unconventional Resources Assets: Over the past three years Egdon has successfully increased its

unconventional resources acreage position in Northern England by 266% to c. 205,800 acres net (833km² net) through a series of targeted acquisitions, farm-ins and success in the 14th Licensing Round.

Wressle Oil Field: We remain committed to, and optimistic about, obtaining planning consent for the development of the Wressle oil discovery, despite the refusal of our applications in January and July 2017.  We now look forward to the planning appeal in early November and the resulting decision, which is likely in early 2018.

Fiskerton Airfield Acquisition: We acquired the Fiskerton Airfield producing oil field (EXL294) in the East Midlands which adds production from the effective date of 1 January 2017.  We are confident that production levels and profitability from the field can be enhanced by well workovers.  

Financial and Statutory Information

Revenue from oil and gas production during the year was lower at £1.04 million (2016: £1.59 million) on production of 38,346 barrels of oil equivalent ("boe") (2016: 64,604 boe).

The Group recorded a loss of £1.70 million for the year ended 31 July 2017, reduced by 36.7% compared to 2016, after write downs, pre-licence costs and impairments of £0.19 million (2016: loss of £2.69 million after write downs, pre-licence costs and impairments of £0.72 million).

The Group has maintained a focus on managing cash resources and at year-end had net current assets of £6.40 million (2016: £4.18 million) of which £6.06 million was cash (2016: £2.68 million).

The Group remains debt free.

In line with last year, the Directors do not recommend the payment of a dividend.

Portfolio Management

Egdon has completed its exit from France during the period.  The Company had held interests in France since 1998 and with the sale of Egdon Resources (New Ventures) Limited in 2010 for £4.5 million, ultimately realised a profitable return on our French involvement.

In the UK, the Company was awarded interests in nine new licences in the 14th Licensing Round and, with the subsequent acquisition of PEDL278 and of EXL294, held effective interests in 43 UK Licences at year-end (2016: 32).

UK Unconventional Resources

Over the past three years Egdon has successfully increased its unconventional resources acreage position in Northern England by 266% to c. 205,800 acres net and its undiscovered gas initially in place ("GIIP") by 180% to a mean volume of 50.9 TCF through a series of targeted acquisitions, farm-ins and success in the 14^th Licensing Round.

The remainder of 2017 and the early part of 2018 is expected to see significant activity in the sector with planned drilling, hydraulic fracturing and testing of two horizontal wells at Preston New Road by Cuadrilla, hydraulic fracturing and testing operations by Third Energy at Kirby Misperton-8, and 3D seismic acquisition by INEOS in the East Midlands including over parts of Egdon's licences in the Wellbeck Low.  The testing at Kirby Misperton-8 has potential read through to Egdon's interests in the neighbouring Cloughton gas discovery (PEDL343) and the prospective Carboniferous section at the Resolution Prospect offshore.

In relation to our own licence activity, the operator of PEDL140, IGas, has advised that it intends to drill Springs Road-1, the potentially play opening Gainsborough Trough exploration well, in early 2018 once all planning conditions have been discharged. This is a key well for Egdon as it is located in our core area for unconventional resources.  The well will drill a thick Lower Carboniferous sequence and will provide a full suite of modern data with which to evaluate the play.

We have also made considerable technical progress on our operated and non-operated 14th Round Licences since their award and are planning new seismic acquisition on several licences during 2018.

Conventional Resources Exploration and Appraisal

There is significant potential for growth via exploration and appraisal drilling within our existing conventional resources

portfolio of assets.  The lower capital and operating costs associated with onshore UK developments mean that new

projects remain commercially attractive even with lower commodity prices.  

However, the pace of our exploration drilling activity is in part dependent upon successful farm-outs as we look to manage carefully our cash resources and technical risk.

Egdon's next drilling activity is likely to be the Holmwood-1 conventional resources exploration well in Weald Basin licence PEDL143 (operator Europa Oil and Gas Limited).  Operations are expected to commence in H1 2018 once all final approvals are in place.  In addition to the Portland and Corallian sandstones, this well will target Kimmeridge limestones which have been proven at Horse Hill-1 (8km to the east of Holmwood), Brockham (5km to the north-east) and, most recently, at Broadford Bridge. Egdon's costs for this test of this high potential play will be carried up to a cap of £0.59 million.

Egdon expect to commence operations at Biscathorpe-2 (PEDL253) in early 2018 and, dependent upon securing a farm-out, at the North Kelsey Prospect (PEDL241), both located in Lincolnshire.

Egdon has made further progress during the period with the Resolution Prospect (P.1929) just offshore the North Yorkshire coast.  We now plan to acquire a 3D marine seismic survey during 2018 to optimise the planning for an offshore well to appraise this 1966 gas discovery.  Egdon continues to seek an industry partner and/or investors prior to commencing the survey.

Production

Production during the period was 105 boe per day ("boepd") (2016: 177 boepd), from Ceres, Keddington and Avington with a contribution from Fiskerton Airfield, in line with our latest guidance of 100 -110 boepd.

Outlook

Our initial production guidance for the coming period remains at 100 -110 boepd.  We expect to increase this when the workovers at Fiskerton Airfield have been completed and the outcome of the planning appeal for the Wressle field development is known.

An independent evaluation of the net gas in place for our unconventional resources has given a figure of 50.9 TCF which shows a considerable increase over the last estimate made two years ago. Our conventional portfolio contains a number of very attractive prospects which we are looking to progress in the next 12 to 18 months.

Our main operational effort during the coming period will be focused on:

·      Workovers of the producing wells at Fiskerton Airfield

·      Subject to the outcome of the planning inquiry, bringing the Wressle-discovery into commercial production

·      Drilling of wells at Springs Road-1, Holmwood-1, Biscathorpe-2 and North Kelsey-1

·      Introducing a funding partner and acquiring a marine 3D survey over the Resolution Prospect, prior to finalising a drilling location

The fundamentals of the business are robust with the Company debt free and holding a range of high potential assets in the UK, a location and jurisdiction which remains commercially attractive even under lower commodity prices. Our cash position allows us to deliver on our near-term strategy. Lastly, I would like to thank our shareholders for their continued patient support and our dedicated team for their professionalism and hard work through the year.

Philip Stephens

Chairman

30 October 2017

Managing Director's Operating Review

I am pleased to update shareholders with a more detailed review of our assets, operations and plans with a

focus on progress against our strategy, key priorities, risks and potential growth drivers.

Our website (www.egdon-resources.com ) provides details of all of our assets and operations.

UK Unconventional Resources

Egdon has built a significant unconventional resources acreage position in Northern England (c. 205,800 acres net (833km² net)) through a series of targeted acquisitions, farm-ins and success in the 14th Round.  Egdon now holds a material interest in a number of key prospective geological basins including the Gainsborough Trough, the Widmerpool Basin, the Cleveland Basin and the Humber Basin and has reported an independently assessed mean volume of undiscovered GIIP of 50.9 TCF.

In the Gainsborough Trough, the operator IGas has advised that it intends to drill the potentially play opening exploration well Springs Road-1 (PEDL140, Egdon 14.5% interest carried through the well) in early 2018.  This is a key well for Egdon as it is located in our core area for unconventional resources, and will provide a full suite of modern data with which to evaluate the play.

In April 2017, we announced the acquisition of an additional 12% interest in PEDL209 located to the immediate east of PEDL140, and the signature of a new option agreement with Total which, if exercised, would provide for a carried work programme valued at up to £4.85 million to Egdon's 36% retained interest. Elsewhere in the same basin, we announced in June the acquisition of a non-operated 50% interest in PEDL278 containing the Kirk Smeaton tight gas discovery with additional unconventional resources potential.

We have made considerable progress on our operated and non-operated 14th Round licences since formal award in July 2016.  Work to date has included extensive cuttings sampling and analysis and integration with petrophysical models, reprocessing and interpretation of existing seismic data, and interpretation of new gravity data.

In Humber Basin licence PEDL334 Egdon has reprocessed and interpreted 207km of existing vintage 2D seismic data which will inform the planning and design of a new 100km 2D seismic programme over the licence.  In the Widmerpool Basin Egdon has reprocessed 450km of vintage 2D seismic data over adjoining licences PEDL306 and PEDL201 to aid in the planning of a new 50km 2D seismic programme.

In our non-operated licences in the Cleveland Basin, PEDL343 and PEDL259, operator Third Energy has carried out extensive mineralogical studies on drill cuttings from key regional wells to compare them with Kirby Misperton-8 which is expected to be tested soon.  These studies have provided encouragement that the geology on these licences is similar to that penetrated by Kirby Misperton-8.

We have begun to explore the potential for farming-out interests in certain of our licences where Egdon currently holds high equity positions as part of our strategy to advance proof of concept exploration at minimum cost to our investors.

Conventional Resources Exploration and Appraisal

France

The Company completed its exit from France during the year by withdrawing from the renewal process for both the Pontenx and Mairy permits.  The Company's attention and resources are now focused solely on the UK.

UK

We have made some progress during the period with our strategy to add additional reserves through an active UK

conventional resources drilling programme, whilst managing technical risk and financial exposure through farm-out and

deal-making.

Egdon's next drilling activity is likely to be the Holmwood-1 conventional exploration well in Weald Basin licence PEDL143 (Egdon 18.4%) where the operator, Europa Oil and Gas ("Europa"), has advised that they expect to commence operations in H1 2018 once all final approvals are in place.  In addition to targets in the Portland and Corallian sandstones, where Europa has Estimated Mean Prospective Resources of 5.6 million barrels ("mmbbls") of oil (net Egdon 1.03 mmbbls), Holmwood-1 will also test the highly prospective Kimmeridge limestone play.  The Horse Hill-1 well (UK Oil and Gas Investments plc ("UKOG")) is located some 8km to the east of Holmwood in a similar structural

position and tested 323 barrels of oil per day ("bopd") from Portland sandstones and 1,365 bopd in total from two limestone intervals in the Kimmeridge Clay Formation.  Egdon's costs are  carried on the Holmwood-1 well by UKOG up to a cap of £0.59 million.  Over the next few months extended well tests at Horse Hill-1 (UKOG), production at Brockham (Angus Energy plc) and testing at Broadford Bridge-1 (UKOG) will provide further insights into the commerciality of the Kimmeridge limestone play and its potential at Holmwood.

The Oil and Gas Authority ("OGA") has granted Egdon licence extensions for both PEDL253 (Biscathorpe) and PEDL241 (North Kelsey) to 30 June 2018.  In July, Egdon announced the issue of the Environmental Permit required for the operated Biscathorpe-2 exploration well in Lincolnshire licence PEDL253.  The Biscathorpe Prospect is estimated by Egdon to hold Mean Prospective Resources of 14 mmbbls of oil (Egdon 7.3 mmbbls).  Operations at Biscathorpe-2 are expected to commence early in 2018.

We also continue to pursue partnership opportunities for the North Kelsey Prospect in Lincolnshire licence PEDL241 where we estimate Mean Prospective Resources of 6.5 mmbbls of oil (Egdon 5.2 mmbbls) in stacked reservoir targets, and hope to drill the well by mid-2018.

Egdon has made continued progress with the Resolution Prospect (337 billion cubic feet ("bcf") of gas, Egdon 100%) in UK offshore licence P.1929.  Following the interpretation and mapping of reprocessed seismic data, we now plan to acquire a new 3D seismic survey during 2018 to confirm the potential resource volumes and enable optimisation of the planning for an offshore appraisal well.  Egdon has completed the design, feasibility and tendering for this survey and is actively seeking an industry partner and/or investor for this next stage of the project. The 3D survey will also assist in quantifying the Carboniferous potential within and around the Resolution Prospect where prospectivity in tight gas sands, a play currently being tested by BP offshore and Third Energy onshore, may be significant on this large regional structural high.

Production

Production during the period was 105 boepd (2016: 177 boepd) from Ceres, Keddington, Avington and Fiskerton Airfield, in line with the revised guidance of 100 -110 boepd.  Production was lower than originally expected at the start of the period due to the timing of Ceres maintenance and the delay to the expected start-up of the Wressle oilfield development.

The Ceres gas field has been shut-in since October 2016 with attributable production derived from "back-out" gas produced from the Mercury and Neptune gas fields.  Installation of a new flow meter at Ceres, expected in 2018 will facilitate simultaneous production from Ceres with the other fields in the system.  The timing of the 2016 (September-October) and 2017 (July) maintenance shut-downs has resulted in only nine months of production contribution from Ceres during the reported financial year which has resulted in a reduction in revenue in the year.

The Keddington oil field continues to produce in line with forecasts from the K-3Z well at c. 24 bopd (net to Egdon 11 bopd) and we now expect to take a decision on further drilling on the field in early 2018.  Avington also continues to produce broadly in line with expectations.  

In July 2017, Egdon announced the acquisition of 100% of the producing Fiskerton Airfield oil field in Lincolnshire licence EXL294 for $0.75 million.  The field has suffered from a lack of investment over recent years and we plan to undertake simple, low-cost workover operations to enhance production and profitability in the short-term, adding valuable near-term cash-flow to Egdon's portfolio.  In the longer term, we will investigate the potential to enhance productivity through in-fill drilling.  The acquisition has an effective date of 1 January 2017.

A significant focus during the period has been to progress our Wressle oilfield development, where planning consent was refused by the North Lincolnshire District Council Planning Committee at meetings in January and July 2017 despite recommendations to approve from the council's planning officers on each occasion.  We have co-joined appeals against both of these decisions and a planning inquiry is to be held in early November 2017.

The inquiry will be heard by an independent planning inspector who will consider the applications in the context of their

planning merits.  A successful outcome to this process would lead to the commencement of operations to establish long-term production which would be expected to add 125 bopd to Egdon's production.  The Environmental Permits for the development were granted in April 2017.

Egdon has interests in a number of currently shut-in fields where we continue to seek innovative ways of bringing them back into profitable production.  For example, we have initiated discussions with third parties on potential further investment in, and the restarting of production from, the shut-in Dukes Wood (PEDL118) and Kirklington (PEDL203) oil fields.  If an agreement were to be reached we would expect operations to commence in 2018.  

We also continue to evaluate the shut-in Waddock Cross oil field (PL090) where we have nearly completed reprocessing 3D seismic data, and the Kirkleatham gas field (PEDL068) where we have completed specialist processing of key seismic lines to confirm the remaining unproduced gas resources and have identified additional gas potential within the underlying Carboniferous sandstones.  

Outlook

Production guidance for the coming financial year is stable at 100 -110 boepd from Ceres, Keddington, Avington and Fiskerton Airfield.  This will be revisited once the results of the workovers at Fiskerton Airfield and the outcome of the Wressle planning inquiry are known.  For example, a successful outcome to the planning appeals for Wressle could add 125 bopd to Egdon's production later in the 2017-2018 financial year.  

In addition to pursuing the Wressle planning inquiry, our main operational focus during the coming period will be:

·      Completing the workover operations at Fiskerton Airfield

·      Drilling the exploration wells at Springs Road-1 and Holmwood-1 where we have significant carried positions

·      Introducing a partner and acquiring the marine 3D seismic survey over the Resolution Prospect and progressing with plans for drilling

·      Drilling exploration wells at Biscathorpe-2 and potentially North Kelsey-1 in 2018

·      Progressing farm-out discussions in certain of our unconventional resources assets

We are at an important juncture in terms of UK Onshore sector activity with the coming period seeing the drilling and testing of several unconventional resources wells and the long-term testing of the Kimmeridge limestones play, potentially leading to an increased valuation for the UK onshore sector as a whole and especially those companies with a broad range of acreage exposure such as Egdon.  Springs Road-1 will be especially important to us in this respect.  Positive news from these activities will help drive our planned farm-out activity in these narrowly held opportunities.  With this background, the quality of our assets, our planned operations, and current financial position, we remain confident and optimistic in our ability to deliver value for our shareholders.

I would like to record my thanks for the continued efforts of the small but professional and committed team at Egdon who continue to work hard on behalf of shareholders.

Mark Abbott

Managing Director

30 October 2017

EGDON RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 JULY 2017

		2017	2016
	Notes	£	£
Continuing operations
Revenue		1,039,348	1,586,120
Cost of sales - exploration costs written off and pre-licence costs		(32,961)	(74,523)
Cost of sales - write off of French assets		(158,291)	-
Cost of sales - impairments and impairment reversals		-	(643,000)
Cost of sales - depreciation		(462,500)	(1,269,155)
Cost of sales - other		(922,510)	(1,219,218)
Total cost of sales		(1,576,262)	(3,205,896)
Gross loss		(536,914)	(1,619,776)
Administrative expenses		(1,178,249)	(1,144,720)
Other operating income		58,145	112,456
		(1,657,018)	(2,652,040)
Finance income		4,947	8,314
Finance costs		(46,775)	(41,845)
Loss before taxation		(1,698,846)	(2,685,571)
Taxation		-	-
Loss for the year		(1,698,846)	(2,685,571)
Other comprehensive income for the year		-	-
Total comprehensive income for the year attributable to equity holders of the parent		(1,698,846)	(2,685,571)
Basic loss per share	2	(0.68)p	(1.21)p
Diluted loss per share		(0.68)p	(1.21)p

EGDON RESOURCES PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 JULY 2017

	Notes	2017	2016
		£	£
Non-current assets
Intangible assets		19,230,801	18,370,375
Property, plant and equipment		9,263,814	8,682,892
Total non-current assets		28,494,615	27,053,267
Current assets
Trade and other receivables		1,506,610	2,540,987
Available for sale financial assets		50,000	50,000
Cash and cash equivalents		6,056,824	2,678,780
Total current assets		7,613,434	5,269,767
Current liabilities
Trade and other payables		(1,216,166)	(1,085,005)
Net current assets		6,397,268	4,184,762
Total assets less current liabilities		34,891,883	31,238,029
Non-current liabilities
Provisions	3	(2,187,056)	(1,803,324)
Net assets		32,704,827	29,434,705
Equity
Share capital		14,550,727	14,164,337
Share premium		25,202,194	20,619,616
Share based payment reserve		225,033	226,401
Retained earnings		(7,273,127)	(5,575,649)
		32,704,827	29,434,705

EGDON RESOURCES PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 JULY 2017

	2017	2016
	£	£
Cash flows from operating activities
Loss before tax	(1,698,846)	(2,685,571)
Adjustments for:
Depreciation and impairment of fixed assets	463,838	1,918,685
Exploration costs written off	176,840	44,564
Foreign exchange loss/(gains)	16,208	(27,546)
Revaluation of accrued income	-	103,258
Decrease in trade and other receivables	1,034,480	215,698
(Decrease)/increase in trade payables and other payables	(456,255)	172,818
Finance costs	46,775	41,845
Finance income	(4,947)	(8,314)
Share based remuneration charge	-	65,971
Cash  used in  operations	(421,907)	(158,592)
Interest paid	-	-
Taxation paid	-	-
Net cash flow used in operating activities	(421,907)	(158,592)
Investing activities
Finance income	4,947	8,314
Payments for exploration and evaluation assets	(908,323)	(2,141,571)
Purchase of property, plant and equipment	(145,433)	(237,250)
Net cash used in capital expenditure and investing activities	(1,048,809)	(2,370,507)
Financing activities
Issue of shares	5,075,023	-
Costs associated with issue of shares	(210,055)	-
Net cash flow generated from financing	4,864,968	-
Net increase/(decrease) in cash and cash equivalents	3,394,252	(2,529,099)
Cash and cash equivalents as at 31 July  2016	2,678,780	5,180,333
Effects of exchange rate changes on the balance of cash held in foreign currencies	(16,208)	27,546
Cash and cash equivalents as at 31 July 2017	6,056,824	2,678,780

In 2017 significant non cash transactions comprised the issue of equity share capital with a market value of £104,000 as consideration for the acquisition of additional interests in licences PEDL201 and PEDL209. In 2016 there were no significant non cash transactions.

EGDON RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 JULY 2017

Group			Share based
	Share	Share	payment	Retained	Total
	capital	premium	reserve	earnings	equity
	£	£	£	£	£
Balance at 1 August 2015	14,164,337	20,619,616	160,430	(2,890,078)	32,054,305
Loss for the year	-	-	-	(2,685,571)	(2,685,571)
Total comprehensive income for the year	-	-	-	(2,685,571)	(2,685,571)
Share option charge	-	-	65,971	-	65,971
Balance at 31 July 2016	14,164,337	20,619,616	226,401	(5,575,649)	29,434,705
Loss for the year	-	-	-	(1,698,846)	(1,698,846)
Total comprehensive income for the year	-	-	-	(1,698,846)	(1,698,846)
Issue of ordinary shares	384,615	4,775,988	-	-	5,160,603
Share issue costs	-	(210,055)	-	-	(210,055)
Share options exercised	1,775	16,645	(1,368)	1,368	18,420
Balance at 31 July 2017	14,550,727	25,202,194	225,033	(7,273,127)	32,704,827

EGDON RESOURCES PLC

Notes to the Financial Statements

FOR THE YEAR ENDED 31 JULY 2017

1. Basis of Accounting and Presentation of Financial Information

The financial information set out in this announcement does not constitute the statutory accounts of the Group for the years ended 31 July 2017 or 31 July 2016.  The financial information has been extracted from the statutory accounts of the Group for the years ended 31 July 2017 and 31 July 2016. 

The Directors have prepared the accounts on the going concern basis which assumes that the Group will continue in operational existence without significant curtailment of its activities for the foreseeable future. 

The auditor, Nexia Smith & Williamson, has reported on the statutory accounts for the years ended 31 July 2017 and 2016; the audit reports were unqualified and did not contain statements under either section 498(2) or 498(3) of the Companies Act 2006.

The statutory accounts for the year ended 31 July 2016 have been delivered to the Registrar of Companies; those for the year ended 31 July 2017 were approved by the Board on 30 October 2017 and will be delivered to the Registrar of Companies following the Annual General Meeting.

The Annual Report for the year ended 31 July 2017, including the auditor's report, will be posted to shareholders during the week commencing 6 November 2017 and will be available from the same date both to be downloaded from the Company's website at www.egdon-resources.com and in hard copy from Egdon Resources plc, The Wheat House, 98 High Street, Odiham, Hampshire, RG29 1LP.

There were no changes to the Group's accounting policies for the year ended 31 July 2017 as compared to those published in the statutory financial statements for the year ended 31 July 2016. 

This preliminary announcement was approved by the Board on 30 October 2017. 

2. Loss per share
Basic loss per share
	2017	2016
	£	£
Loss for the financial year	(1,698,846)	(2,685,571)
Basic weighted average ordinary shares in issue during the year	248,740,775	221,345,811

	Pence	Pence
Basic loss per share	(0.68)	(1.21)

Diluted loss per share
	2017	2016
	£	£
Loss for the financial year	(1,698,846)	(2,685,571)
Diluted weighted average ordinary shares in issue during the year	248,740,775	221,345,811

	Pence	Pence
Diluted loss per share	(0.68)	(1.21)

For 2017 and 2016, the share options are not dilutive as a loss was incurred. 

3. Provision for liabilities
	Other	Decommissioning	Reinstatement
	provisions	provision	provision	Total
Group	£	£	£	£
At 1 August 2015	20,525	1,585,763	221,000	1,827,288
Provision created during the year	-	11,545	14,140	25,685
Transfer of provision on reclassification to D&P assets	-	47,000	(47,000)	-
Disposals	-	(91,494)	-	(91,494)
Unwinding of discount	-	41,845	-	41,845
At 1 August 2016	20,525	1,594,659	188,140	1,803,324
Provision created during the year	-	331,791	5,166	336,957
Unwinding of discount	-	46,775	-	46,775
At 31 July 2017	20,525	1,973,225	193,306	2,187,056

At 31 July 2017 provision has been made for decommissioning costs on the productive fields at Fiskerton, Keddington, Kirkleatham, Ceres, Avington, Dukes Wood/Kirklington and Waddock Cross. Provision has also been made for reinstatement costs relating to exploration and evaluation assets where work performed to date gives rise to an obligation, principally for site restoration. Assumptions, based on the current economic environment, have been made which management believe are a reasonable basis upon which to estimate the future liability. This estimate will be reviewed regularly to take into account any material change to assumptions. Actual costs will depend on future market prices, any variation in the extent of decommissioning and reinstatement to be performed, whether the works can be performed as part of a multi-well programme or in isolation and progress in the relevant technologies. Decommissioning and reinstatement costs are expected to arise between 2018 and 2038.

Other provisions represent the amount expected to be payable to the former shareholder of Egdon Resources Avington Ltd under the Net Profit Interest agreement entered into at the time of acquisition. Of the total provision, £2,567 (2016: £3,117) is estimated to be payable within one year.

4. Annual General Meeting

The Annual General Meeting will be held at the offices of Norton Rose Fulbright, 3 More London Riverside, London, SE1 2AQ at 11.30 hours on 7 December 2017.

 

END

 

 

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