Sale of interest in Fiskerton Airfield Oil Field

RNS Number : 5878V

Egdon Resources PLC

06 November 2017

 

                6 November 2017

EGDON RESOURCES PLC

 ("Egdon" or "the Company")

Sale of interest in the Fiskerton Airfield Oil Field

Egdon Resources plc (AIM:EDR) is pleased to announce the sale of a 20% interest in the recently acquired producing Fiskerton Airfield oil field in Lincolnshire licence EXL294 to Union Jack Oil plc ("Union Jack").

The cash consideration for the 20% interest is approximately £137,000. In addition, Union Jack will wholly fund re-processing of the 3D seismic dataset at a gross cost of £35,000.  The combined consideration and carry is equivalent to approximately £165,000 (or approximately $218,000).

The effective date of the agreement is 3 November 2017 and Union Jack will receive 20% of all production revenues from Fiskerton from that date. Completion of the acquisition is subject to Oil and Gas Authority approval.

Following completion of the transaction the interests held in EXL294 will be:

Egdon Resources U.K. ltd                      80%

Union Jack Oil plc                                  20%

On 10 July 2017 Egdon Resources U.K. Limited (or "the Company") announced the acquisition of a 100% interest in, and operatorship of the Fiskerton Airfield oil field from Cirque Energy (UK) Ltd ("Cirque") for a cash consideration of $750,000. This acquisition completed on 27 October 2017.

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

"We are pleased to welcome Union Jack as a partner on the Fiskerton Airfield Oil Field.  We have elected to sell a minority interest in the field to manage our overall financial exposure to the asset going forward and to enable evaluation of the up-side at minimal cost through the carried seismic reprocessing. As we stated back in July 2017 the field has suffered from a lack of investment over recent years and we plan to undertake simple low-cost workovers to enhance production and profitability in the short-term, adding valuable near-term cash-flow to Egdon's portfolio. In the longer term, the reprocessed 3D seismic will inform our views on the potential to enhance productivity through in-fill drilling."

For further information please contact:

Egdon Resources plc

Mark Abbott                                                                              01256 702 292

Buchanan

Richard Darby, Anna Michniewicz                                               020 7466 5000

Nominated Adviser and Broker - Cantor Fitzgerald Europe               

David Porter (Corporate Finance)                                                 020 7894 7000

Caspar Shand Kydd / Alex Pollen (Sales)

Joint Broker - VSA Capital Limited

Andrew Monk (Corporate Broking)                                               020 3005 5000

Andrew Raca (Corporate Finance)

Notes to Editors:

Fiskerton Airfield - The Fiskerton Airfield oil field is located approximately 7 kilometres to the East of the City of Lincoln.  The field was discovered in 1997 and cumulative production has totalled around 440,000 barrels of oil from the most likely mapped Oil in Place estimated at 2.2 million barrels.  The oil is of good quality (35.2°API) and is exported by road tanker to Immingham, North East Lincolnshire. Egdon estimate that in excess of 100,000 barrels of oil remain recoverable from the existing wells. The second producing well (FA-1) is currently shut-in awaiting a workover. The field also has a dedicated water disposal well to reinject produced water into the reservoir for pressure support (FA-2).  The field has suffered from a lack of investment in recent years.

The field is currently producing circa 16 bopd from one of two production wells (FA-3).    Egdon plans to enhance the cash flows and profitability of the operation by increasing production initially to between 30 and 40 bopd via low cost well interventions.  During the next few months it is planned to workover both the currently producing FA-3 and the shut-in FA-1 wells by installing new tubing, pumps and isolating water producing zones.

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 43 licences in the UK 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 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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