Wressle Oil and Gas Discovery: Update

RNS Number : 0321D

Egdon Resources PLC

22 October 2015

 

EGDON RESOURCES PLC

                                                                                                                    22 October 2015

("Egdon" or "the Company")

Wressle Oil and Gas Discovery: Update

Egdon Resources plc (AIM:EDR) is pleased to provide an update on operations and plans for the Wressle oil and gas discovery located to the east of Scunthorpe in Lincolnshire on licence PEDL180 where Egdon operates with a 25% interest.

As announced previously, it had been the PEDL180 joint venture (JV) partners' intention to undertake further well test operations on both the Ashover Grit and Penistone Flags intervals. However, since completion of the Extended Well Test ("EWT") operations in early September 2015, the group has completed a detailed review of the data gathered to date and are now sufficiently comfortable to continue working towards compiling a field development plan ("FDP") without requiring further time-consuming and costly testing operations.

As previously reported, flow rates from the Ashover Grit measured in the initial testing phase (80 barrels of oil per day ("bopd")) were affected by localised near well bore formation damage (high "Skin" factor) and so are not representative of the flow rates that could be attained from this interval. Reservoir engineering analyses of the well test pressure and production data indicates that initial production rates in excess of 500bopd could be anticipated if the effects of the "Skin" can be successfully countered. It is therefore the JV's intention that plans for the development of Wressle will include a comprehensive suite of operations and procedures, designed to mitigate the impact of the "Skin" on production rates, which form part of the initial workover programme for the well to prepare it for long-term production.

Egdon and the PEDL180 partners now plan to progress to an agreed FDP for Wressle with a view to it being ready in Q1 2016 for submission to the Oil and Gas Authority ("OGA") for approval. The FDP will be compiled using drilling and test data from the well together with reprocessed 3D seismic data to quantify the developable resource volumes attributable to Wressle. In addition, planning and permitting applications will also be required to be submitted to North Lincolnshire Council and the Environment Agency.

Production from Wressle is currently expected to be phased, with initial development focused on the Ashover Grit oil reservoir.

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

"We are delighted that the petroleum engineering and geotechnical work conducted to date has given the PEDL180 joint venture sufficient confidence to move directly towards FDP preparation for Wressle, without further costly and time-consuming testing. We are now focussed on delivering the required consents to enable us to commence commercial oil production from the Ashover Grit in H2 2016."

For further information please contact:

Egdon Resources plc

Mark Abbott, Jerry Field                                                                                          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

Richard Redmayne (Corporate Broking)

Joint Broker - VSA Capital Limited

Andrew Monk (Corporate Broking)                                                                         020 3005 5000

Andrew Raca (Corporate Finance)

Notes to Editors:

The Wressle Oil Discovery -The Wressle Prospect was defined on proprietary 3D seismic data, which was acquired by Egdon in February 2012.  The structure is located on trend with the producing Crosby Warren oil field and the Broughton-B1 oil discovery, both to the immediate northwest, and the Brigg-1 oil discovery to the immediate southeast.  All contain oil in various different sandstone reservoirs within the Upper Carboniferous succession. The pre-drill gross mean Prospective Resources at Wressle, as calculated by Egdon, were estimated to be 2.1 million barrels ("bbl") of oil. This will be updated following a review of the drilling and test data together with the results of the interpretation and mapping of the re-processed 3D seismic data.

The Wressle-1 well reached a total depth (TD) of 2240 metres measured depth (MD) (1814 metres true vertical depth below OS datum (TVDSS)) on 23 August 2014.  Elevated mud gas readings were observed over large parts of the interval from the top of the Penistone Flags reservoir target (1831.5 metres MD) to TD. The interests in the Wressle-1 well are:

Egdon Resources U.K. Limited                                     25.00% (Operator)

Celtique Energie Petroleum Limited                               33.33%

Europa Oil & Gas Limited                                              33.34%

Union Jack Oil plc                                                            8.33%

The well was logged using measurement whilst drilling (MWD) logging tools run on the drill string.  Petrophysical evaluation of the log data indicated the presence of potential hydrocarbon pay in three main intervals;

·      Penistone Flags - up to 19.8 metres measured thickness (15.9 metres vertical thickness)

·      Wingfield Flags - up to 5.64 metres measured thickness (5.1 metres vertical thickness)

·      Ashover Grit - up to 6.1 metres measured thickness (5.8 metres vertical thickness)

On 9 February 2015, shareholders were updated on the successful Ashover Grit Flow Test, which recorded flow rates of 80 barrels of oil per day and 47 thousand cubic feet of gas per day during a 16 hour main flow period. No appreciable volumes of water were observed.  The oil is of good quality with a gravity of 39-40° API.

On 19 February 2015, shareholders were updated on the successful Wingfield Flags Flow Test, which recorded flow rates of up to 182 barrels of oil per day of good quality 39-40° API oil on free flow, along with up to 456 thousand cubic feet of gas per day.

On 27 February 2015, shareholders were updated on the initial successful Penistone Flags test, which produced gas at facilities-restricted flowrates of up to 1.7 million cubic feet of gas per day with associated oil of up to 12 barrels of oil per day and no free water.

On 27 March 2015, shareholders were updated on the second successful Penistone Flags test.  Zone 3A in the Penistone Flags was perforated over a 7.5 metre interval and produced good quality oil with a gravity of 33^o API.  A total of 98.5 barrels of oil were recovered during the test (of which flow induced by swabbing operations produced 34.3 barrels of oil).  This equates to a rate of approximately 77 barrels of oil per day (bopd).

During the current EWT the Zone 3A perforations were produced for a total of 254hrs over a 13 day period from the 5th to 17th July 2015. Zone 3A was initially produced by sucker rod pump and was then allowed to free flow to surface after the wellbore and perforations had fully cleaned-up. Over the full 13 day period the following separator cumulative volumes were produced: - 1,127 barrels ("bbl") of oil, 147 bbl of kill brine and 2,790 Mscf of gas.

Operations at the Wressle site will not involve the process of high volume hydraulic fracturing ('fracking') for shale gas.

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. 

Egdon currently holds interests in thirty four 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 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 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).

 

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