Biscathorpe Update

RNS Number : 5652F

Egdon Resources PLC

19 July 2021

 

19 July 2021

EGDON RESOURCES PLC

("Egdon" or "the Company")

Biscathorpe Carbon Intensity Study and Planning Update

Egdon Resources plc (AIM: EDR, "Egdon"), an established UK-based exploration and production company focused on the hydrocarbon-producing basins of the UK, is pleased to advise the positive results of a Carbon Intensity study carried out on the Biscathorpe project covered by Licence PEDL253 where the Company holds a 35.80% operated interest.

The study was conducted on behalf of the PEDL253 Joint Venture by Gaffney, Cline & Associates Limited ("GaffneyCline"), an international energy consultancy. GaffneyCline's study delivered the following conclusions:

· The Biscathorpe project as currently envisaged has an AA rating for Carbon Intensity for its potential long-term production of oil using GaffneyCline's own rating system

· The Carbon Intensity for the Biscathorpe project is significantly lower than the current UK average and compared with other onshore analogues

· Once in production, GaffneyCline estimates that the Biscathorpe project will have a Carbon Intensity of just 3.06 grams of Carbon Dioxide equivalent per mega joule (gCO₂Eq/MJ)

· Potential exists to improve the Carbon Intensity to 1.49gCO₂Eq/MJ through adoption of gas to grid optimisation

The Carbon Intensity of the Biscathorpe project was estimated by GaffneyCline as a conceptual field development using the Oil Production Greenhouse Gas Emissions Estimator (OPGEE) developed at Stanford University. This was supplemented by reference to GaffneyCline's proprietary Global field database together with Biscathorpe specific field development assumptions. The results of the study were benchmarked against other development analogues in GaffneyCline's proprietary database. The study also provided recommendations that could have a further impact on reducing emissions sources (Figure 1).

Table 1 : Biscathorpe Project Carbon Intensity Rating (Source: GaffneyCline, July 2021)

Carbon Intensity Range (gCO2 Eq/MJ)
		Current	Potential
AA	≤5	3.06	1.49
A	5 - 7
B	7 - 11
C	11 - 20
D	20 - 30
E	30 - 50
F	50 - 70
G	Over 70

Egdon can also advise that additional documentation was submitted to Lincolnshire County Council in early July in response to a Regulation 25 notice arising from the initial consultation on the planning application for the Biscathorpe project.  This information will now be subject to a period of consultation before the planning application goes before the Planning Committee, currently anticipated to be in September/October 2021.

Mark Abbott, Managing Director of Egdon, commented:

"The results of GaffneyCline's independent modelling provides strong evidence that a future development at Biscathorpe could achieve a low carbon intensity rating (AA).  The Climate Change Committee has acknowledged that the UK will still be using fossil fuels up to and beyond the UK's Net Zero carbon emissions target of 2050. It follows that the production of fossil fuels should be from that which generates the lowest emissions footprint, which, like Biscathorpe, are indigenous UK sources.

I am also pleased to confirm the submission of additional information in support of our planning application for the Biscathorpe project. This is expected to be considered by the Planning Committee later in 2021.

Biscathorpe represents a material and financially robust opportunity to secure an indigenous oil resource which would generate local and regional economic benefits and have environmental benefits through its lower carbon footprint when compared to imported oil."

For further information please contact:

Egdon Resources plc

Mark Abbott, Martin Durham  01256 702 292

Buchanan

Ben Romney, Chris Judd  020 7466 5000

Nominated Adviser & Joint Broker - WH Ireland Limited 

Chris Hardie, Lydia Zychowska  020 7220 1666

Joint Broker - VSA Capital Limited

Andrew Monk (Corporate Broking)  020 3005 5000

Andrew Raca (Corporate Finance)

Notes to Editors:

Egdon

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

Egdon holds interests in 39 licences in the UK and has an active programme of exploration, appraisal and development within its 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.

GaffneyCline

GaffneyCline is an international energy consultancy, which has been operating worldwide since 1962. GaffneyCline focuses solely on the petroleum and energy industry, and specializes in the provision of policy, strategy, technical and commercial assistance to governments, financial institutions, and national and international oil, gas and energy companies worldwide. The provision of Energy Transition advice and Carbon Intensity Assessments have recently been added as a core component of GaffneyCline's international business ( see www.gaffneycline.com ).

Biscathorpe Highlights

· PEDL253 is located within the proven hydrocarbon fairway of the Humber Basin, on-trend with the Keddington oilfield which produces oil from a Carboniferous Westphalian aged reservoir

· Biscathorpe-2 (EDR: 35.8%) drilled to a TD of 2133 m in February 2019  and suspended for potential side-track

· Oil bearing Dinantian Carbonate reservoir of 68 metres has been confirmed by independent petrophysical analysis and geochemical analyses of cuttings samples carried out by APT confirms the presence of 33-34 API gravity oil

· Dinantian carbonate oil play has gross Mean STOIIP of 24.3 million barrels of oil (mmbo) with an upside of case of 36 mmbo

· Evidence from reprocessed 3-D seismic for a thickened Westphalian Sandstone reservoir interval is apparent with Gross Mean Prospective Resources associated with the Westphalian target total 3.95 mmbo with an upside case of 6.69 mmbo and, where economic modelling of the Westphalian target alone, yields break-even full cycle economics estimated at US$18.07 per barrel and a gross NPV(10) valuation of £55.6 million

· Detailed technical evaluation by the PEDL253 Joint Venture has identified an accessible drilling target on the Biscathorpe Prospect and plans are advanced for drilling B-2Z during H2 2021 that will allow both the Dinantian Carbonate and Basal Westphalian Sandstone targets to be tested

· Planning application submitted during February 2021 for side-track drilling, testing and long-term production of the proposed B-2Z appraisal well, subject to planning consent

· Additional information (Regulation 25) was submitted in early July in support of the planning application

· Planning application is currently expected to go to Lincolnshire County Council's planning committee in September/October 2021

Qualified Person Review

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, this release has been reviewed by Mark Abbott, Managing Director of Egdon, who is a geoscientist with over 30 years' experience and is a member of the Petroleum Exploration Society of Great Britain and a Fellow of the Geological Society.  Mr Abbott has consented to the inclusion of the technical information in this release in the form and context in which it appears.

Evaluation of hydrocarbon volumes 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).

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.

 

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