Egdon Resources plc (AIM:EDR) is pleased to announce that it has acquired from Stelinmatvic Industries Limited (“Stelinmatvic”) its 12% interest in the unconventional resources exploration rights in UK Onshore licence PEDL209 located in one of the Company’s core areas, the Gainsborough Trough. As part of the consideration for this acquisition, Egdon has transferred 12% out of its interest in the remaining conventional prospects on the PEDL209 licence to Stelinmatvic.
As further consideration, Egdon has today issued 580,646 Ordinary Shares in the Company (“the Consideration Shares”) to Stelinmatvic, fully paid. The value of the Consideration Shares is equivalent to £54,000 based on the average closing mid-price for the five days prior to the day of completion. The Consideration Shares represent 0.22 per cent. of the enlarged share capital of the Company. Application has been made for admission of the Consideration Shares to trading on AIM, which is expected to become effective on 7 April 2017. Following admission the Company will have 259,984,822 shares in issue
Concurrent with this transaction, Egdon has entered into a new Opt-In Agreement with Total E&P UK Limited (“Total”), a wholly owned subsidiary of Total SA. Under the terms of the agreement, Total has an option to farm-in to unconventional resources exploration in PEDL209, exercisable until 31 December 2018 and to earn a 36% interest in the licence by paying Egdon’s remaining 36% (together with Total’s own 36% interest) of an exploration programme of up to a gross £13.47 million which would include seismic acquisition and the drilling of a well.
This agreement with Total supersedes the previous agreement announced on 30 January 2014. The transaction with Stelinmatvic has already completed and the interests in PEDL209 are now:
|Current||Post option exercise|
|Egdon Resources U.K. Limited||35%||72%||36%|
|Blackland Park Exploration Limited||28%||28%||28%|
|Stelinmatvic Industries Limited||27%||–||–|
|Union Jack Oil plc||10%||–||–|
|Total E&P UK Limited||
The acquisition adds a total of 1,898 net acres to Egdon’s unconventional resources exploration acreage holdings, or 949 net acres post option exercise.
Commenting on the transaction, Mark Abbott, Managing Director of Egdon, said:
“We are pleased to increase our interest in the unconventional resources prospectivity of PEDL209 and secure a new opt-in agreement with Total, which would fully carry our increased interest in the licence if exercised.
Following the approval by Nottinghamshire County Council last November of IGas operated drilling at Springs Road in the neighbouring licence of PEDL140, we look forward to being carried on potentially play-opening wells in the Gainsborough Trough, our core area for unconventional resources exploration.
We continue to believe that indigenous onshore gas could be a major contributor to the UK’s future energy mix”