Egdon Resources plc (AIM:EDR) is pleased to provide an update on operations following the end of the first half of the Company’s 2018-2019 financial year (“H1 2019”) which ended on 31 January 2019. The Company’s half year results are scheduled to be announced on 9 April 2019.
Production from the Ceres gas field and the Keddington and Fiskerton Airfield oil fields during the H1 2019 period was 30,026 barrels of oil equivalent (“boe”), at an average of 164 boe per day (“boepd”) (H1 2018 17,962 boe, 98 boepd), in line with previously stated guidance.
Production recommenced from the Ceres well in late October 2018 following installation of a new flow meter. Egdon’s gas sales from Ceres since restart over the period from November 2018 to January 2019 has averaged £234,000 per month.
Egdon’s total production during January 2019 was 238 boepd, demonstrating the impact of the increased Ceres gas flow.
As reported on 15 February 2019 drilling operations at Springs Road-1 in the Gainsborough Trough shale play are progressing faster than expected (EDR 14.5% carried). The operator IGas advised that the well has encountered shales including the Bowland Shale on prognosis, at c.2,200 m, and that the coring operation is underway. We are encouraged by the operational performance and provisional descriptions of the Bowland Shale and look forward to IGas Energy plc providing updates as the results from the drilling and coring operations become available.
We also note the preliminary gas concentrations that have been reported from the Millstone Grit sequence in the Tinker Lane-1 well which are highly encouraging for the potential gas resource play in the Gainsborough Trough, where Egdon has a significant acreage position in addition to Springs Road.
As reported on 20 February 2019 preliminary analysis of the Biscathorpe-2 well (38.5% operated interest) indicates that the Basal Westphalian Sandstone target was encountered high to prognosis and was poorly developed at the Biscathorpe-2 location. The Biscathorpe “play” has therefore not been properly tested by the well and potential remains elsewhere on the prospect.
The open-hole section has now been sealed with cement plugs and the well suspended to retain the option for a potential future side-track which would require additional consents including planning permission. This will be considered once the new well data is integrated into an updated subsurface model. The drilling rig and ancillary equipment are in the final stages of being demobilised from site.
We are in third-party discussions relating to the introduction of an industry partner to fund the planned 3D seismic and appraisal drilling on the Resolution Gas Discovery and hope to be in a position to update shareholders in the coming period. Correspondingly, we are also in discussions with contractors in relation to a potential autumn 2019 3D seismic survey over Resolution. We also anticipate providing an updated resource assessment following completion of an independent competent persons report (CPR).
On 1 February 2019, we submitted to the Planning Inspectorate an appeal against the refusal of planning consent for the development of the Wressle oil field. We have received a swift response to confirm validation of the appeal from the Planning Inspectorate and look forward to confirmation of the inquiry date in due course.
On 24 January 2019, we were advised that the Planning Inspector had upheld our appeal to extend the existing planning consent for the Wressle site until 24 January 2020. This provides the required time for the appeal of the development refusal to be concluded.
Commenting on current operations Mark Abbott, Managing Director of Egdon Resources plc, said:
“I am pleased to report the positive impact of Ceres on our production and cash flow during the period and we look forward to continuing strong production from the field for the rest of the financial year and beyond.
We are eagerly anticipating the results from Springs Road-1 where progress to date has been significantly ahead of schedule and provisional descriptions of the Bowland Shale, which was encountered on prognosis, are promising. We also note the encouraging preliminary gas concentrations reported from Tinker Lane-1 which are highly positive for the Gainsborough Trough shale play.
We will now take some time to integrate the results of the Biscathorpe-2 well into our subsurface models before deciding on how best to progress further exploration on this large prospect.
We will also be focussed on obtaining a positive outcome from the Wressle planning inquiry.”