Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement in respect of a further farm-out of Licence PEDL253 to Union Jack Oil plc (“Union Jack”). Union Jack originally farmed-in to the licence in March 2013.
Under the terms of this new farm-out, Union Jack will earn an additional 1.2 % interest in PEDL253 from Egdon in return for paying 2.4% of the costs of the planned Biscathorpe-2 exploration well. Union Jack has also agreed terms with Montrose Industries Limited to earn a further 0.8% interest in PEDL253 in return for paying 1.6% of the well costs.
On completion of these new farm-outs the interests in PEDL253 will be:
Egdon Resources U.K. Limited 52.8% (Operator)
Montrose Industries Limited 35.2%
Union Jack Oil plc 12.0%
As previously announced, Planning Consent was awarded for the Biscathorpe-2 well in March 2015. Under the terms of the farm-out agreements, Egdon’s share of the well costs will now be reduced to 45.6% as a result of Union Jack carrying in total 7.2% of the costs for Egdon. The transfer of interests is subject to approval by the Oil and Gas Authority.
The Biscathorpe Prospect is located approximately 15 kilometres to the west of the Keddington oil field and 36 kilometres to the south-east of the Wressle-1 discovery currently being tested by Egdon. It is defined on 3D seismic data and was previously explored by BP in 1987 with the Biscathorpe-1 well drilled in a structurally crestal location. That well penetrated a thin basal sandstone unit which is interpreted to have been oil bearing but was not tested. The sand unit is expected to thicken down-dip from the crest of the structure and there is also potential for stratigraphic trapping to the west which could increase the expected gross prospective resources as assessed by Egdon from a Best Estimate case of 14 mmbo up to a High case of 41 mmbo.
Commenting on this latest farm-out, Mark Abbott, Managing Director of Egdon Resources plc, said ;
“While this is only a relatively small scale additional farm-out, we are encouraged by Union Jack’s continued confidence in the prospectivity of the Biscathorpe structure, which we plan to test later in 2015 with the Biscathorpe-2 well.”