4 September 2006 - Portland Gas Storage Project Update

Egdon Resources Plc (AIM : EDR), the onshore UK focused energy company, today provides an update on its gas storage project on the Isle of Portland in Dorset.

Portland Gas Limited (‘Portland Gas’), a wholly owned subsidiary of Egdon Resources Plc, is pleased to report that it has received a report from DEEP. Underground Engineering GmbH of Germany confirming the technical feasibility of the proposed gas storage facility in Dorset. Subject to obtaining planning approval for the project, Portland Gas will commence construction as soon as possible.

Following analysis of the data acquired from the Portland-1 well, which completed drilling operations on 21 June 2006, Portland Gas can now confirm that it proposes to develop a facility comprising 14 caverns within the Triassic Saliferous Beds capable of storing 1000 million cubic metres (35 billion cubic feet) of natural gas.

The facility is being designed to enable the injection or withdrawal of gas at a rate of 20 million cubic metres per day (0.7 billion cubic feet per day). At these rates the entire storage volume could be filled or emptied in 50 days.

Portland Gas is now finalising the environmental statement for the project and the planning and pipeline construction authorisation applications are being prepared for submission in the fourth quarter of 2006.

Assuming planning approval for the project is forthcoming in the first half of 2007, it is anticipated that an initial storage capacity would be available to make gas deliveries to the national transmission system in the winter of 2010, with full capacity being available during 2013.

The Directors of Egdon Resources Plc are also pleased to announce that N M Rothschild & Sons have been appointed as financial advisors with specific responsibilities for Portland Gas.

Commenting on the project’s progress, Andrew Hindle, Joint Managing Director of Egdon, said:

“We are delighted to be able to confirm the feasibility of a gas storage project on the Isle of Portland.  The proposed facility would make a significant contribution to the storage needs and security of gas supply for the United Kingdom, with the capability when fully developed to provide up to 5% of the national gas demand on a winter’s day.

The appointment of Rothschilds to assist with the financing of the project and securing storage agreements with customers is an important element of our plans to ensure that construction of the facility can commence immediately upon a grant of planning approval.”