Egdon Resources plc (AIM:EDR) advises that its application to extend to 31 December 2021, the existing planning permission to drill conventional exploratory oil well at North Kelsey-1 site location was approved at today’s meeting of the Lincolnshire County Council Planning Committee.

Commenting on the decision, Mark Abbott, Managing Director of Egdon Resources plc, said:

“We are pleased with today’s decision to extend the planning permission as it enables us to progress our drilling plans at the North Kelsey conventional oil prospect which have been delayed by COVID-19 restrictions.  We will now progress our plans for drilling during 2021, providing a further potentially material near-term value catalyst for Egdon”

Egdon Resources plc (AIM: EDR, “Egdon”) is pleased to advise that the proceeds from the confidential settlement agreement between Egdon Resources U.K. Limited (acting on behalf of the PEDL253 joint venture partners) and Humber Oil & Gas Limited as announced on 24 June 2020 have been received.

The joint parties to PEDL253 have therefore resolved the dispute arising under the JOA and look forward to co-operating in the future in the development of the licence.

Egdon Resources plc (AIM:EDR) is pleased to advise the completion of the Farm-In Agreement with Shell U.K. Limited (“Shell”) in respect of offshore licences P1929 and P2304 (“the Licences”) which contain the Resolution and Endeavour gas discoveries.

The OGA has approved the transfer of a 70% interest and operatorship in both licences and the associated documentation including Joint Operating Agreements in respect of both licences has now been executed.

Egdon retains a 30% interest in the Licences.  Under the terms of the Farm-In Agreement, Shell will pay 85% of the costs of the acquisition and processing of the 3D seismic survey covering both the Resolution and Endeavour gas discoveries. Under the terms of the Licences, this work needs to be completed by 31 May 2021.  The carry on the acquisition costs will be capped at US$5 million gross, beyond which Egdon would pay 30% of the survey costs. Furthermore, Shell will also pay 100% of all studies and manpower costs through to the well investment decision on the Licences.

Commenting on the news, Mark Abbott, Managing Director of Egdon Resources plc, said:

“We are delighted to have completed the transfer of interest and operatorship to Shell in respect of these important, and potentially valuable, licences for Egdon.  The focus will now be on progressing appraisal activity on the Resolution and Endeavour gas discoveries. 

The first part of this activity will be the acquisition of a marine 3D seismic survey during Q1 2021.  We look forward to building on our good working relationship with Shell and benefiting from their substantial worldwide operational experience and expertise.”

Egdon Resources plc (AIM: EDR, “Egdon”) is pleased to provide an update on the Wressle Oil Field Development (“Wressle”) where site works have now commenced.  Wressle is located in North Lincolnshire Licences PEDL180 and PEDL182 where the Company holds a 30% operated interest.

The site civils contractor has mobilised and the works to reconfigure the Wressle production site have commenced.  These works, which represent an important step in the development, will comprise the installation of a new High Density Polyethelene (HDPE) impermeable membrane; French drain system; an approved surface water interceptor; the construction of a purpose-built bund area for storage tanks; a tanker loading plinth and an internal roadway system.

The Company remains on track for first oil during H2 2020 as previously advised.

The Wressle development comprises a number of key stages which are summarised below along with progress made to date:

• Discharging the planning conditions, finalising detailed designs, tendering and procurement of materials, equipment and services and finalising all HSE documentation and procedures;
  • the key planning conditions have been discharged, progress with detailed design tendering and procurement is proceeding as per the plan and all HSE documentation and procedures are progressing as per expectation
• Installation of groundwater monitoring boreholes and establishing baseline groundwater quality through monitoring and analysis;
  • four groundwater monitoring boreholes have been installed and two rounds of sampling and analysis undertaken to date
• Reconfiguration of the site;
  • site works have commenced
• Installation and commissioning of surface facilities;
• Sub-surface operations; and
• Commencement of production

Commenting, Mark Abbott, Managing Director of Egdon Resources plc, said:

“We continue to make good progress with the Wressle development,  in line with the expected timeline, despite the challenges of the current operating environment. The commencement of the site reconfiguration works represents an important step in the progress to first oil which will increase Egdon’s production by 150 barrels of oil per day. Wressle is economically robust with an estimated project break-even oil price of $17.62 per barrel. 

We maintain our guidance of first oil during H2 2020 and will continue to update stakeholders as works progress.”

The Company is pleased to announce the appointment of WH Ireland Limited as Egdon’s Nominated Adviser (“Nomad”) and joint broker.