Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached an agreement to acquire the entire issued share capital of Yorkshire Exploration Limited (“YEL”). YEL is a private company, which holds an 8% interest in Petroleum Exploration and Production Licence PEDL068 in North Yorkshire and Cleveland in the Cleveland Basin. Egdon is operator of PEDL068 with a 40% interest.
The consideration for this acquisition is £133,058 and will comprise £75,000 to be satisfied by the issue of new Egdon shares to YEL at completion and the assumption of £58,058 of YEL debt. The number of consideration shares will be calculated based on the average closing mid-price for the five days prior to the day of completion. The commercial date of the transaction is 1 August 2014. The transaction is subject to approval of the change of control by DECC.
YEL is owned and controlled by Mr. John Rix and his family members. Mr. Rix was a non-executive Director of Egdon until his retirement from the Board in late 2011.
Licence PEDL068 contains the Kirkleatham gas field which is shut-in pending the potential drilling of a side-track well to target an un-drained portion of the field up-dip from the existing producer well. The licence also contains the Westerdale/Ralph Cross gas discovery where planning consent is in place for an appraisal well, which is likely to be drilled in 2015/2016. Exploration in PEDL068 to date has concentrated on conventional Permian age carbonate gas plays but the licence may also contain other conventional and unconventional prospectivity.
Egdon estimates that the transaction will add approximately 0.70bcf of Best Estimate Contingent and Prospective Conventional Resources to Egdon’s resource inventory.
The current interests in PEDL068 are as follows:
|Egdon Resources U.K. Ltd||40.00%|
|Sterling Resources (UK) Ltd||47.00%|
|Yorkshire Exploration Limited||8.0%|
|Montrose Industries Limited||5.0%|
Commenting on the acquisition, Mark Abbott, Managing Director of Egdon said:
The acquisition of YEL adds to our existing interest in PEDL068 and adds incremental conventional resources and other prospectivity to the Company