Egdon Resources plc (AIM: EDR, “Egdon”) is pleased to provide an update on progress to first oil at the Wressle Oil Field Development (“Wressle” or the “Development”) and to provide details of a loan facility for £1 million.
Wressle Development Update
Wressle is located in North Lincolnshire Licences PEDL180 and PEDL182 where the Company holds a 30% operated interest.
The site reconfiguration works have been completed and the installation of surface facilities is currently ongoing at the Wressle site. To date, the storage tanks and inspection gantry have been installed and work is advanced in respect of the electrical and control system installation. All works have been completed safely whilst operating under Egdon’s “COVID secure” operating procedures. Delivery of all remaining equipment is expected to be completed during December, despite the many challenges posed by the impact of COVID-19 restrictions on the current supply chain operating environment.
The PEDL180 and PEDL182 Joint Venture has decided to defer the workover operations and final commissioning of Wressle until January 2021, eliminating any possible operating and supply chain issues associated with the December festive period shutdown.
As such, mobilisation of the workover rig will now take place immediately in the New Year, with the workover being completed and initial oil flows now anticipated during late January 2021.
Recent photographs of the Wressle development site can be found on Egdon’s Twitter feed @EgdonResources.
Egdon is also pleased to announce that it has secured a £1,000,000 loan facility.
A Facility Agreement and Charge Agreement (the Agreements) have been executed with Union Jack Oil plc which will provide the loan facility on commercial terms. The main terms of the Agreements are;
- 18 month term
- Principal sum payable at end of the term or in part or in full at any earlier time at the borrowers discretion
- Interest accrues on a daily basis on the outstanding loan amount at an interest rate of 11% per annum and is payable quarterly commencing on the earlier of the quarter following first production or on April 2021
- The loan is secured against an unencumbered 25% interest in the Wressle Project (PEDL180, and PEDL182), including the Wressle development project and associated infrastructure
Commenting, Mark Abbott, Managing Director of Egdon Resources plc, said:
“We are pleased to have secured this source of debt financing as we progress the Wressle development to first production during January 2021. Since the award of Planning Consent in January 2020, significant progress has been made despite the challenging operating environment.
Achieving commercial production from Wressle will have a significant and positive impact on Egdon’s production and cash flow, with an expected net production increase of 150 barrels of oil per day. We note the recent strengthening of the market price for oil, which will further improve the economics of this already robust development, with a project break-even oil price of $17.62 per barrel.
We look forward to updating stakeholders on further progress early in the New Year.”