Egdon Resources plc (AIM:EDR) is pleased to announce it has signed a Farm-out Agreement in respect of a further 5% interest in PEDL253 with Humber Oil & Gas Limited (“Humber”, a private company) under the same terms as the farm-out previously announced on 5 and 20 March. PEDL253 is located in Lincolnshire and contains the Biscathorpe Prospect, scheduled for drilling around mid-2018.
Humber will acquire a further 5% of Egdon’s interest in PEDL253 by paying their pro-rata share of the Biscathorpe-2 well cost plus an additional £50,000 (£10,000 per percentage point interest acquired). Humber will also acquire an additional 5% from Montrose Industries Limited’s interest in PEDL253 under the same terms.
The Biscathorpe Prospect is located on the southern margin of the Humber Basin on trend with, and to the west of, the producing Keddington oil field (Egdon operated).
The Biscathorpe-2 well will target a conventional sandstone reservoir of Westphalian (Carboniferous) age in an area of the structure where the sandstone is predicted to thicken away from Biscathorpe-1 (BP, 1987) which found oil in a 1.2 metres thick sandstone. The Mean Gross Prospective Resources at Biscathorpe are estimated by Egdon to be ca. 14 million barrels of oil.
The transaction is subject to approval from the Oil and Gas Authority. On completion, the interests in PEDL253 will become:
Egdon Resources U.K. Limited (Operator) 35.80% (22.53% share of well cost*)
Montrose Industries Limited. 22.20% (12.76% share of well cost*)
Union Jack Oil Plc 22.00% (37.57% share of well cost*)
Humber Oil & Gas Limited 20.00 % (27.14% share of well cost*)
* at the current estimated well cost