Preliminary Results

Egdon Resources PLC
23 October 2007



For Immediate Release                                            23 October 2007


                      EGDON RESOURCES PLC ('THE COMPANY')

              Preliminary Results for the year ended 31 July 2007


Egdon Resources Plc (AIM: EDR), the UK focussed energy company, is pleased to
announce preliminary results for the year ended 31 July 2007.


Operational Highlights


Gas Storage

   •Portland Gas Storage Project parameters confirmed as 1,000 million cubic
    metres capacity facility with injection/ withdrawal rates of 20 million
    cubic metres per day

   •Planning applications and pipeline construction authorisation application
    submitted for Portland Gas Storage Project in March 2007

   •Front end engineering design completed and invitation for tender package
    issued during September for the pipeline and facilities construction

   •New project announced for potential salt cavern gas storage project at
    Larne Lough, County Antrim, Northern Ireland


Oil & Gas Exploration


   •Acquisition of PEDL005 (Remainder) containing the Keddington Oil Field
    which was restored to production during June 2007

   •Production testing ongoing at Avington-3z well

   •Acquisition of four licences from Stag Energy Limited

   •Farm-outs concluded for wells in licences PEDL071 and PEDL141

   •Drilling activity planned at Burton Agnes, Grenade and Tees during late
    2007

   •Currently holds 24 licences in UK and France


Financial Highlights


   •Loss for period of £537,968 (2006: £519,250)

   •Loss per share of 0.85p (2006: 0.94p)

   •Net funds as at 31st July 2007 £7.9 million (31st July 2006: £1.89
    million)

   •Completion of an institutional placing during October 2006 to raise
    £11.52 million net of expenses

   •Completion of an institutional placing during September 2007 to raise
    £4.8 million net of expenses


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


'2006/7 has been another year of progress in our two activities of oil and gas
exploration and production and gas storage development. As previously reported
we are on track to achieve the creation of two separate companies by way of a
demerger so that shareholders will own shares in each distinct business, both of
which will be admitted to AIM.'


For further information please contact:


Egdon Resources Plc
Andrew Hindle, Joint Managing Director      01256 702 292
Mark Abbott, Joint Managing Director


Buchanan Communications
Nicholas Melson                             020 7466 5000

Seymour Pierce
Jonathan Wright                             020 7107 8000



CHAIRMAN'S STATEMENT


The results for the year to 31st July 2007 show a consolidated loss before
taxation of £537,968 (2006: £519,250). No dividend is being proposed. The
company had net cash balances at the year end of £7.9 million (2006: £1.89
million). In October 2006, we completed a placing with institutions to raise £12
million before costs. A second institutional placing in September 2007 realised
£5 million before costs. As a result we have been able to continue to fund the
development of our gas storage projects and also our drilling and development
programme in our oil and gas activity.


Gas Storage


The key achievement in our gas storage activity was the submission in March 2007
of a number of planning applications to Dorset County Council and Department of
Business, Enterprise and Regulatory Reform (formerly the DTI) covering the
creation of salt storage caverns on Portland, Dorset and the constructing of a
pipeline connecting the storage facility with the National Gas Grid. The United
Kingdom is moving from being self sufficient from its reserves in the North Sea
to being a net importer as these reserves decline. The creation of this gas
storage facility is therefore a significant national project. Dorset County
Council is co-ordinating consideration of the applications on behalf of the
numerous councils and agencies involved. The time required for consideration has
taken longer than originally expected to accommodate requests for additional
supporting information to the applications, in respect of new archaeological
fieldwork, geotechnical and other surveys and the adoption of additional
environmental mitigation measures. These works and designs have now been
completed and we expect a decision to be made during the first quarter of 2008.
The front-end engineering design work was completed in September 2007 and
invitation to tender packages have been sent out to pre-qualified companies for
construction of the facilities and pipelines. On this basis, contracts could be
granted on award of planning permission to enable construction to commence
immediately, and first gas stored in the facility on time during 2011.


We were pleased to announce in July a new gas storage project in Northern
Ireland. We have been granted an exploration licence from the Crown Estate to
evaluate a storage project at Larne Lough, County Antrim. Northern Ireland at
present has no gas storage facilities and if, following the seismic programme to
be undertaken by the end of 2007, the suitability of the site is confirmed, then
planning will be sought to develop this important strategic facility. The
funding of the evaluation of this project will be largely met from the proceeds
of the placing of shares in September this year, which realised £5 million
before expenses.


Clearly it has been an encouraging year for Portland Gas and we look forward to
being able to announce the grant of planning permission so that construction of
the storage caverns can commence on Portland.


Oil and Gas Exploration and Production


There have been a number of additions to our oil and gas exploration and
production business through acquisition. Earlier in the year, as mentioned in my
interim statement, we acquired the Keddington Oil Field in the East Midlands for
£250,000 in cash. Production has been restarted in one of the two wells and is
currently producing around 40-45 barrels of oil per day. We plan to optimise
production from the field during the coming year with restoration of production
from a second well.


In October we completed the acquisition of four licences in the East Midlands
from Stag Energy Limited for a total consideration of £125,000 of which £100,000
was payable in cash and the balance by the issue of Egdon shares. This
acquisition adds significant acreage to one of our core areas and has the
potential to add material reserves. We will initially focus our efforts on the
potential identified in the Eakring-Dukes Wood oil field.


In August we announced that production testing of our well at Avington, which is
operated by Star Energy Plc, produced at 470 barrels per day. We have a 20 per
cent interest in this well and these early results are very encouraging. Further
testing is currently taking place to establish the full potential for oil
recovery and we will announce the results in due course.


At our Kirkleatham gas discovery our plan is to sell gas to a local industrial
user. Negotiations are proceeding and we hope to have the field on production
during 2008.


Outlook


As previously mentioned we expect the planning decision for our Portland Gas
Storage project in the first quarter of 2008. Assuming a positive outcome, we
will be in a position to proceed with financing arrangements for the
construction. Together with our advisors we are already considering various
options in order to maximise value to our shareholders.


We have achieved our previously stated aim in our oil and gas division to move
into production in 2007 and first revenues are now being received. Further
development plans should see increasing production and revenues in 2008. We can
also look forward to wells on the Burton Agnes, Grenade and Tees prospects
during the remainder of 2007.


The demerger is now planned to become effective in January 2008 subject to
approval at an Extraordinary General Meeting and a separate circular will be
sent shortly to shareholders giving full details.


All in all, 2007 has been another exciting year and, with every expectation that
our important goals will be achieved soon, we thank shareholders for their
continuing support. I would also like, once again, on behalf of the Board, to
pay tribute to the hard work of our expanding team led by Mark Abbott and Andrew
Hindle.



Philip Stephens

22 October 2007

EGDON RESOURCES PLC

Consolidated Profit and Loss Account

FOR THE YEAR ENDED 31 JULY 2007

                                                            2007      2006
                                           Notes               £         £

Turnover                                                  41,397    13,991

Cost of sales                                            (53,396)  (14,000)

Gross loss                                               (11,999)       (9)

Administrative expenses                                 (987,651) (931,503)

Other operating income                                    59,123   247,708

Operating loss                                          (940,527) (683,804)

Interest receivable                                      402,559   164,554

Loss on ordinary activities before                      (537,968) (519,250)
taxation

Taxation on loss on ordinary                                   -         -
activities

Loss for the year                                       (537,968) (519,250)

Basic and diluted loss per share             1            (0.85)p   (0.94)p


There were no recognised gains or losses other than the loss for the year.


The consolidated profit and loss account has been prepared on the basis that all
operations are continuing.


EGDON RESOURCES PLC

Consolidated Balance Sheet

As At 31 July 2007

                                                             2007       2006
                                             Notes              £          £
FIXED ASSETS
Intangible assets                                      14,735,661  8,284,367
Tangible assets                                           147,304      2,503

                                                       14,882,965  8,286,870

CURRENT ASSETS
Oil stock                                                  24,169          -
Debtors                                                   640,625  1,037,403
Investments                                             7,740,584  1,506,190
Cash at bank and in hand                                  159,092    386,837

                                                        8,564,470  2,930,430

CREDITORS: due within one year                         (2,015,593)  (927,562)

NET CURRENT ASSETS                                      6,548,877  2,002,868

TOTAL ASSETS LESS CURRENT LIABILITIES                  21,431,842 10,289,738

PROVISION for LIABILITIES                                (246,591)  (411,520)


NET ASSETS                                             21,185,251  9,878,218


CAPITAL and RESERVES

Called up share capital                                   654,657    571,499
Share premium account                          2       20,387,373  8,625,530
Profit and loss account                        2          143,221    681,189

SHAREHOLDERS' FUNDS                                    21,185,251  9,878,218


EDGDON RESOURCES PLC

Consolidated Cash Flow Statement

For The Year Ended 31 July 2007

                                                            
                                                             2007        2006
                                               Notes            £           £

Net cash outflow from operating activities       3     (1,161,991)   (705,598)

Returns on investment and servicing of finance
Bank and investment interest receipts                     402,559     164,554

Capital expenditure and financial investment
Payments to acquire intangible fixed assets            (4,917,427) (5,326,500)
Payments to acquire tangible fixed assets                (161,493)     (1,448)

                                                       (5,078,920) (5,327,948)

Net cash flow before use of liquid resources
and financing                                          (5,838,352) (5,868,992)

Management of liquid resources
(Increase)/decrease in short term deposits             (6,234,394)    538,390

Financing
Proceeds from issue of ordinary shares                 12,325,001   4,999,500
Costs associated with share issue                        (480,000)   (186,026)

(Decrease) in cash                               4       (227,745)   (517,128)

Reconciliation of net cash flow to movement
in net funds
(Decrease) in cash in the year                           (227,745)   (517,128)
Cash to increase/(decrease) liquid resources            6,234,394    (538,390)

Change in net funds                                     6,006,649  (1,055,518)
Net funds at 1 August 2006                              1,893,027   2,948,545

Net funds at 31 July 2007                               7,899,676   1,893,027



NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2007


1. LOSS PER SHARE

                                                            2007         2006
                                                               £            £

Net loss for the financial year                         (537,968)    (519,250)

Basic weighted average ordinary shares in
Issue during the year                                 63,392,512   55,110,604

                                                           Pence        Pence

Basic loss per 1p ordinary share                           (0.85)       (0.94)


The basic earnings per share has been calculated on the loss on ordinary
activities after taxation of £537,968 divided by the weighted average number of
ordinary shares in issue of 63,392,512 during the period. The share options
which were outstanding at 31 July 2006 are not considered dilutive as their
inclusion would decrease the loss per share. For this reason a diluted earnings
per share calculation is not required. No other instruments which may be
dilutive are in issue.


2. RESERVES

                                                 Share  Profit and
                                               premium        loss
Group                                          account     account       Total
                                                     £           £           £

At 1 August 2006                             8,625,530     681,189   9,306,719
On shares issued in the year                12,241,843           -  12,241,843
Share issue costs                             (480,000)          -    (480,000)
Loss for the year                                    -    (537,968)   (537,968)

At 31 July 2007                             20,387,373     143,221  20,530,594


3. RECONCILIATION OF NET OUTGOING RESOURCES TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES

                                                           2007        2006
                                                              £           £

Operating loss for the year                            (940,527)   (683,804)
Depreciation                                             16,692       1,922
Loss on disposal of intangible assets                         -      40,844
Decrease/(increase) in debtors                          396,778    (804,544)
(Increase) in stock                                     (24,169)          -
(Decrease)/increase in creditors                       (445,836)    421,964
(Decrease)/increase in provisions                      (164,929)    318,020

                                                     (1,161,991)   (705,598)


4. ANALYSIS OF CHANGES IN NET CASH RESOURCES AND DEBT


                                                As at                   As at
                                             1 August        Cash     31 July
                                                 2006        flow        2007
                                                    £           £           £

    Cash at bank and in hand                  386,837    (227,745)    159,092
    Current asset investments               1,506,190   6,234,394   7,740,584

                                            1,893,027   6,006,649   7,899,676

5. BASIS OF PRESENTATION


The financial information set out in this announcement, which does not
constitute the statutory accounts of the Group, is extracted from the
consolidated audited statutory accounts for the year ended 31 July 2007, which
were approved by the Board on 22 October 2007. The auditors have reported on
those accounts in accordance with section 235 of the Companies Act 1985. Their
report was unqualified and did not contain a statement under section 237(2) or
237(3) of the Companies Act 1985. The statutory accounts for the year ended 31
July 2006 have been delivered to the Registrar of Companies. Those for 2007 will
be delivered after the Annual General Meeting. The results have been prepared on
the basis of the accounting policies adopted in the statutory accounts for the
year ended 31 July 2006.



6. APPROVAL


The preliminary announcement was approved by the Board on the 22 October 2007.


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