Operational Update

Egdon Resources plc (AIM: EDR, “Egdon”), an established exploration and production company focused on the hydrocarbon-producing basins of the onshore UK, provides an update on operations across its portfolio.

Key Highlights:

• Initial production from Wressle-1 surpassing expectation at 884 barrels of oil per day (“bopd”) and 480,000 cubic feet of gas per day on a restricted choke with no formation water seen.
• Plans to reduce production constraints and define plateau rate at Wressle-1.
• Planning application for the side-track drilling, testing and production at Biscathorpe to be heard in November.
• Shell U.K. Limited advises that the 3D seismic survey over the Resolution and Endeavour gas discoveries has been delayed beyond February 2022.
• Detailed well design, facilities specification, and commercial modelling nearing completion for the phased redevelopment of the shut-in Waddock Cross oil field with a Final Investment Decision expected to be made by the end of 2021, which could lead to further drilling activity during 2022.
• Detailed reservoir engineering work underway at Keddington to support target selection for a side-track development well, which could be drilled in 2022 and access gross Mean Contingent Resources of 567,000 barrels of oil which remain to be produced.
• A programme to plug and abandon the existing Dukes Wood-1 oil well and recomplete this for geothermal heat production has been developed and will shortly be submitted to the HSE.

Wressle PEDL180 & PEDL182 (Egdon 30%):

The Wressle-1 well has continued to exceed production expectations since the successful completion of the coiled tubing operations on the 19 August 2021.  To date, instantaneous flow rates in excess of 884 barrels of oil per day (“bopd”) along with 480,000 cubic feet of gas (c. 80 barrels of oil equivalent per day) have been achieved from the Ashover Grit on a significantly restricted choke setting (30.5/64ths) and with a high flowing wellhead pressure.  Thus far, no formation water has been seen as the well continues to clean up. 

Even with the excellent flow rates seen to date, the full flow potential of the well remains to be fully tested due to constraints being experienced with the gas handling equipment.  

The forward plan is to remove these constraints to production and complete the testing of the well’s potential before defining a plateau production rate matching the well behaviour to the installed facilities, long term operational objectives and prudent reservoir management.

We can also advise that we have now received the revision to the Environmental Permit, enabling the installation of a combustion plant to facilitate gas to electric generation and a new potential revenue stream.

Since being returned to production on 19 August the well has generated revenues in excess of £300,000 for Egdon.

Biscathorpe PEDL253 (Egdon 35.8%):

We now expect the planning application for the side-track drilling, testing and production at Biscathorpe to be heard at a meeting of Lincolnshire County Council’s planning committee during November.

Subject to planning the Biscathorpe side-track will target the Dinantian Carbonate, where a 68 metre oil column was discovered in Biscathorpe-2,  with gross Mean Prospective Resources of 2.55 million barrels of oil (mmbo), and the Basal Westphalian Sandstone, where gross Mean Prospective Resources of 3.95 mmbo have been estimated by Egdon.

P1929 & P2304 Resolution and Endeavour (Egdon 30%):

Egdon has been advised by licence operator, Shell U.K. Limited, that the 3D seismic survey planned for February 2022, over the Resolution and Endeavour gas discoveries, will not proceed on the original expected timeline.  Shell will consult with the OGA to discuss the delay to the survey and we will provide a further update once these discussions have progressed.

A Competent Person’s Report (Schlumberger Oilfield UK PLC) has reported gross Mean Contingent Resources of 231 billion cubic feet (“bcf”) of gas  attributable to the Resolution discovery with Egdon estimating that the Endeavour discovery contains gross Mean Contingent Resources of 18 bcf of gas.  

Waddock Cross PL090 (Egdon 55%):

Third party work is currently ongoing to finalise the well design, facilities specification, and commercial modelling for the phased redevelopment of the shut-in Waddock Cross oil field in Wessex Basin licence PL090.  Independent reservoir modelling has shown that a new horizontal well on the field could yield commercial oil production (500-800 bopd). Given the large in- place oil volume (Mean oil in place of c. 57 million barrels of oil) this asset has been high graded by the Company as planning consent and facilities are in place to test this significant opportunity.

A final investment decision is expected to be made by the end of 2021 which could lead to further drilling activity during 2022.

Keddington PEDL005R (Egdon 45%):

As previously reported, a detailed sub-surface review of the Keddington oil field and the surrounding licence area has highlighted that gross Mean Contingent Resources of 567,000 barrels of oil remain to be produced. This presents an opportunity to increase production via a development well for which planning is already in place. 

Detailed reservoir engineering work is currently being undertaken by ERCE to support the final target selection for a side-track development well, which could be drilled in 2022.

In addition, a near-field exploration opportunity exists at Keddington South, (gross Mean Prospective Resources of 635,000 barrels of oil) and the Louth Prospect (gross Mean Prospective Resources of 600,000 barrels of oil).

Geothermal:

A programme to plug and abandon the existing Dukes Wood-1 oil well and recomplete this for geothermal heat production has been developed for Egdon by Creative Geothermal Solutions Limited and will shortly be submitted to the HSE.  It is anticipated that subject to regulatory approval, this work will commence during Q1 2022.

Mark Abbott, Managing Director of Egdon, commented:

“The Wressle well test operations continue to exceed our expectations with instantaneous rates of over 950 barrels of oil equivalent per day achieved so far.  The well has already begun to yield a material revenue stream which will transform the financial position of Egdon in the coming period.  This production rate means that Wressle is currently the second biggest field in terms of daily production in the onshore UK after Wytch Farm, and we are confident that the well has more to give in the coming period.

We await confirmation from Shell regarding next steps for the Resolution 3D seismic, and we remain optimistic about the long-term potential of this long-burner project for Egdon.  Elsewhere in our portfolio, we are making good progress with several nearer-term projects capable of adding further production, revenues and value to the business.  We are pleased to see activity gaining momentum across the portfolio and look forward to an active year ahead.

I am also pleased with progress in our nascent geothermal business with plans being advanced for repurposing of the Dukes Wood-1 well and wider opportunities being considered.”

Egdon Resources plc (AIM: EDR, “Egdon”), an established exploration and production company focused on the hydrocarbon-producing basins of the onshore UK, is pleased to provide an update on operations at its Wressle Oil Field Development (“Wressle”) located in North Lincolnshire, covered by Licences PEDL180 and PEDL182 and where the Company holds a 30% operated interest.

Egdon is pleased to advise that the coiled tubing operation has been completed safely and successfully and the Ashover Grit reservoir has been returned to flow, under extended well testing operations. The well flow is continuing to clean-up and has not yet reached its full potential. The measured flow rates have exceeded 500 barrels of oil per day under a restricted choke setting, which was the forecast rate following the proppant squeeze operation.

We will provide a further update once stabilised flow rates are established in the coming weeks.

Mark Abbott, Managing Director of Egdon, commented:

“I am delighted to advise that the proppant squeeze operation has been successful in enabling the Wressle well to deliver the target production rate of 500 barrels of oil per day. Oil production will be optimised whilst the Ashover Grit reservoir continues to clean-up.  With this additional 150 barrels of oil per day net to Egdon and the current strong oil price, Wressle will have a transformational impact on Egdon’s near-term cash flow.

Considerable upside remains in the additional reservoirs at Wressle and in adjacent prospects and we expect Wressle to be an important asset for Egdon for a number of years to come.

I would like to take this opportunity to thank all of Egdon’s contractors who have contributed so effectively to delivering this milestone event for the Wressle joint venture.”

Egdon Resources plc (AIM: EDR, “Egdon”), an established exploration and production company focused on the hydrocarbon-producing basins of the onshore UK, is pleased to provide an update on operations at its Wressle Oil Field Development (“Wressle”) located in North Lincolnshire, covered by Licences PEDL180 and PEDL182 and where the Company holds a 30% operated interest.

Egdon is pleased to advise that the proppant squeeze operation on the Ashover Grit reservoir interval in the Wressle-1 well has been completed safely and successfully.  A total of 146 cubic metres of gelled fluid with 17.3 tonnes of ceramic proppant were injected into the Ashover Grit formation in line with the authorised programme.  The injection operations lasted a total of only 1 hour and 30 minutes over a two-day period. (Read more…)

Egdon Resources plc (AIM: EDR) is pleased to announce that at the General Meeting held at 10.00 hours today Shareholders approved all the resolutions proposed in the notice of general meeting sent to Shareholders on 1^st July 2021. Capitalised terms not defined in this announcement shall have the meaning ascribed to them in the notice of meeting.

• Resolution 1, was an ordinary resolution to grant the directors authority to allot Second Tranche Shares, with 01% voting in favour and 0.99% voting against;
• Resolution 2, was an ordinary resolution to grant the directors authority to allot shares pursuant to the exercise of Warrants, with 01% voting in favour and 0.99% voting against, and;
• Resolution 3, was proposed as a special resolution, to disapply pre-emption rights as set out in the notice of the meeting, with 99.07% voting in favour and 93% voting against.

View or Download GM Results

Egdon Resources plc (AIM: EDR, “Egdon”), an established UK-based exploration and production company focused on the hydrocarbon-producing basins of the UK, is pleased to advise the positive results of a Carbon Intensity study carried out on the Biscathorpe project covered by Licence PEDL253 where the Company holds a 35.80% operated interest.

The study was conducted on behalf of the PEDL253 Joint Venture by Gaffney, Cline & Associates Limited (“GaffneyCline”), an international energy consultancy. GaffneyCline’s study delivered the following conclusions:

• The Biscathorpe project as currently envisaged has an AA rating for Carbon Intensity for its potential long-term production of oil using GaffneyCline’s own rating system
• The Carbon Intensity for the Biscathorpe project is significantly lower than the current UK average and compared with other onshore analogues
• Once in production, GaffneyCline estimates that the Biscathorpe project will have a Carbon Intensity of just 3.06 grams of Carbon Dioxide equivalent per mega joule (gCO₂Eq/MJ)
• Potential exists to improve the Carbon Intensity to 1.49gCO₂Eq/MJ through adoption of gas to grid optimisation

The Carbon Intensity of the Biscathorpe project was estimated by GaffneyCline as a conceptual field development using the Oil Production Greenhouse Gas Emissions Estimator (OPGEE) developed at Stanford University. This was supplemented by reference to GaffneyCline’s proprietary Global field database together with Biscathorpe specific field development assumptions. The results of the study were benchmarked against other development analogues in GaffneyCline’s proprietary database. The study also provided recommendations that could have a further impact on reducing emissions sources (Figure 1).

Table 1: Biscathorpe Project Carbon Intensity Rating (Source: GaffneyCline, July 2021)

Egdon can also advise that additional documentation was submitted to Lincolnshire County Council in early July in response to a Regulation 25 notice arising from the initial consultation on the planning application for the Biscathorpe project.  This information will now be subject to a period of consultation before the planning application goes before the Planning Committee, currently anticipated to be in September/October 2021.

Mark Abbott, Managing Director of Egdon, commented:

“The results of GaffneyCline’s independent modelling provides strong evidence that a future development at Biscathorpe could achieve a low carbon intensity rating (AA).  The Climate Change Committee has acknowledged that the UK will still be using fossil fuels up to and beyond the UK’s Net Zero carbon emissions target of 2050. It follows that the production of fossil fuels should be from that which generates the lowest emissions footprint, which, like Biscathorpe, are indigenous UK sources.

I am also pleased to confirm the submission of additional information in support of our planning application for the Biscathorpe project. This is expected to be considered by the Planning Committee later in 2021.

Biscathorpe represents a material and financially robust opportunity to secure an indigenous oil resource which would generate local and regional economic benefits and have environmental benefits through its lower carbon footprint when compared to imported oil.”