Farm-in Agreed for PEDL209

RNS Number : 5881F

Egdon Resources PLC

28 May 2013

 

For Immediate Release

28 May 2013

EGDON RESOURCES PLC

("Egdon" or "the Company")

Farm-in Agreed for PEDL209

Egdon Resources plc (AIM:EDR) is pleased to announce that it has agreed terms with Blackland Park Exploration Limited ("Blackland Park") and Stelinmatvic Industries Limited ("Stelinmatvic") for a farm-in to UK Onshore Petroleum Exploration and Development Licence PEDL209 ("the Licence") located in Lincolnshire.  Under the terms of the Farm-in Agreement Egdon will earn a 60% interest in the Licence in return for paying 100% of the cost of the planned Laughton-1 exploration well to the point of completion of the well for testing or, in the case that the well is a dry hole, abandonment and restoration of the site.  Egdon will also assume operatorship of PEDL209.

The Licence Interests in PEDL209 at completion will be;

Egdon Resources U.K. Limited (Operator)	60%
Blackland Park Exploration Limited	28%
Stelinmatvic Industries Limited	12%

The transfer of interests and operatorship is subject to approval by the Department of Energy and Climate Change.

PEDL209 covers a total area of 64 square kilometres and adjoins Egdon's existing Licences PEDL139 and PEDL140 in the eastern part of the Gainsborough Trough geological basin of the East Midlands Petroleum Province. 

The Laughton Prospect is a structural trap defined on 2D seismic data.  The prospect has multiple conventional Carboniferous sandstone reservoir targets with the primary objective being the Silkstone Rock, an approximately 15 metres thick sandstone interval which is productive in the Corringham oil field 5 kilometres to the South East.  Egdon currently estimate gross Mean Prospective Resources of around 1 million barrels of oil for the Silkstone Rock in the Laughton Prospect.  A planning application for the exploration well is currently under consideration by Lincolnshire County Council.  The estimated well cost is around £1.3 million and, subject to planning consent, Egdon expects to drill the well during the first half of 2014.

A number of additional oil and gas prospects similar to the Laughton structure have also been identified within the Licence's area.

Egdon also recognises that there is potential for significant shale-gas resources to be present within parts of the Licence.  The Company's current evaluation indicates that the Pendleian Shale shale-gas play extends over about 45 square kilometres of PEDL209. Using similar parameters to those defined by RPS Energy in their independent evaluation of the prospective shale-gas resources in PEDL139 and PEDL140, Egdon estimates that the total in-place volume of gas within the Pendleian Shale interval in PEDL209 could alone amount to over 3 Trillion cubic feet.  Further, as with PEDL139 and PEDL140, PEDL209 is interpreted as holding additional shale-gas potential in the thick Lower Carboniferous sequence which underlies the Pendleian Shale but which remains to be tested by drilling in the region.  Neither of these sequences will be penetrated in the planned Laughton-1 well.

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

"We are pleased to have concluded this farm-in in one of our core business areas.  The initial focus will be the drilling of the Laughton-1 exploration well, which will target a conventional prospect with gross Best Estimate Prospective Resources in the primary reservoir target of around 1 million barrels of oil close to existing production.

Importantly the farm-in also delivers on our stated strategy of providing Egdon with increased exposure to shale-gas potential in an area identified by Egdon as containing an extension of the "sweet spot" of the Pendleian Shale play identified in our adjoining Gainsborough Trough licences PEDL139 and PEDL140.

Subject to planning, we expect to drill the Laughton-1 well as part of our planned 2014 drilling programme."

For further information please contact:

Egdon Resources plc

Mark Abbott, Jerry Field                                                                      01256 702292

Buchanan

Richard Darby, Gabriella Clinkard, Tom Hufton                            020 7466 5000

http://www.buchanan.uk.com/

Nominated Adviser and Broker - Cantor Fitzgerald Europe

David Porter, Rick Thompson (Corporate Finance)                     020 7894 7000

Richard Redmayne (Corporate Broking)

Notes to Editors:

Egdon Resources plc

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 twenty nine 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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