Drilling Update

Egdon Resources PLC
14 January 2008


For Immediate Release                                            14 January 2008


                              EGDON RESOURCES PLC


                           ('EGDON' or 'the Company')


             Commencement of drilling operations at Grenade-3 well


Egdon Resources Plc is pleased to announce the commencement of drilling
operations at Grenade-3, in Egdon's operated St Laurent Permit in SW France
Egdon holds a 33.4% interest in the well.


The COFOR MAS 3000 rig completed the rig move on 9 January 2008 and drilling
operations commenced at 12.00 hours on 10 January 2008. The Grenade-3 well will
take approximately 30 days to reach target depth.


The Grenade-3 well is an appraisal of the Grenade heavy oil accumulation. The
discovery well, Grenade Sur Adour-1, was drilled by Elf in 1975 and found a 97m
column of 10 degree API oil. Between 1976 and 1985 around 8,000 barrels of oil
were recovered from intermittent tests, the well being finally plugged and
abandoned during a period of low oil prices in 1985.


An independent report by RPS Troy-Ikoda in 2004 determined that the oil-in-place
within the structure was in the range of 68 to 485 million stock tank barrels
(MMStb), with a Best Estimate of 221 MMStb. During 2005 the Company acquired
40km of 2D seismic and 12km2 of 3D seismic data over Grenade and, by integrating
the new data with both existing reprocessed 2D seismic data and the results of
an extensive regional core study, was able to better define the trap. The
resultant mapped trap is a large three-way up-dip pinch-out of the reservoir on
a low energy carbonate platform. Based on this revised trapping model, Egdon has
determined a range of oil-in-place of 95 to 945 MMStb with a Best Estimate of
300 MMstb.


Grenade-3 is a step-out to the Grenade-1 discovery well and will be drilled as a
vertical pilot hole designed to confirm the oil column and reservoir
distribution. Contingent upon the results of this pilot hole, a horizontal
sidetrack will be drilled and completed for a long term production test to be
undertaken. The production test would utilise modern completion, pumping and
viscosity reduction methods in the horizontal reservoir interval to determine
the likely recoverable reserves and commerciality of the Grenade oil
accumulation.


For further information please contact:


Egdon Resources Plc
Mark Abbott, Joint Managing Director                      01256 702 292
Andrew Hindle, Joint Managing Director                    0208 332 1200

Buchanan Communications
Ben Willey                                                020 7466 5000
Nicholas Melson

Seymour Pierce
Jonathan Wright                                           020 7107 8000


Notes to Editors


The co-venturers in St Laurent Permit are as follows:

+------------------------------------+------------+
|Company                             |    Interest|
+------------------------------------+------------+
|Egdon Resources (New Ventures) Ltd  |     33.423%|
+------------------------------------+------------+
|Sterling Resources UK Limited       |     33.423%|
+------------------------------------+------------+
|Nautical Petroleum plc              |     22.000%|
+------------------------------------+------------+
|Malta Oil and Gas PTY limited       |     11.154%|
+------------------------------------+------------+


Company Background


Egdon is an established, UK-based energy company primarily focused on the
onshore UK. Egdon also has exploration interests in the offshore UK and France.
Egdon's shares are traded on the AIM market.


The Company has developed two distinctive businesses; an oil and gas exploration
and production business which has a portfolio of twenty exploration licences,
and a gas storage business initially focused on the development of a major salt
cavern gas storage facility on Portland, Dorset.


Egdon plans to demerge the two businesses effective 17 January 2008.


In accordance with AIM rules - guidance for mining, oil and gas companies, the
information contained in this announcement has been reviewed and signed off by
the Joint Managing Director of Egdon Resources Mark Abbott, a Geoscientist with
over 21 years experience.



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