Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement in respect of a farm-out of the Laughton-1 exploration well and two other conventional prospects in PEDL209 to Union Jack Oil plc (“Union Jack”).
Under the terms of the farm-out, Union Jack will earn a 10% interest in the Laughton-1 exploration well and two other conventional prospects in PEDL209, in return for paying 16.67% of the cost of the well. The Laughton-1 well is expected to start drilling during February 2016.
The Laughton-1 well will target a structural trap at a depth of over 1,500 metres below ground level defined on vintage two-dimensional seismic data. The Laughton Prospect has multiple conventional Carboniferous sandstone reservoir targets with the primary objective being the Silkstone Rock, an approximately 15 metres thick sandstone interval which is productive in the Corringham Oil Field located five kilometres to the South-East. For clarity, the operations at the site will not, either now or in the future, involve the process of High Volume Hydraulic Fracturing for shale gas.
This farm-out does not include the deeper shale-gas prospectivity on PEDL209, which is located further to the south and west, and which remains subject to an option agreement with Total as announced in January 2015.
On completion of this transaction, which remains subject to approval from the Oil and Gas Authority, the licence interests in the Laughton Prospect and the two other conventional prospects in PEDL209 will be:
Egdon Resources U.K. Limited : 50%
Blackland Park Exploration Limited : 28%
Stelinmatvic Industries Limited : 12%
Union Jack Oil plc : 10%
Commenting on the transaction, Mark Abbott, Managing Director of Egdon said:
“This farm-out helps to optimise the balance of risk and reward for the Company in the exploration of PEDL209’s conventional oil resources, reducing our financial exposure to the near-term Laughton-1 well.
We are once again pleased to welcome Union Jack as a partner following on from their participation in the 2014 Wressle discovery (PEDL181), the current drilling of Keddington-5 sidetrack and the planned Biscathorpe and North Kelsey exploration wells (PEDL253 and PEDL241 respectively).”