Sale of Interests in PEDL118 and PEDL203
Egdon Resources plc (AIM:EDR) is pleased to report that it has reached agreement with Nautical Petroleum AG, a wholly owned subsidiary of Nautical Petroleum plc ("Nautical"), to sell 15% interests in onshore UK Petroleum Exploration and Development Licences ("PEDLs") PEDL118 and PEDL203 located in Nottinghamshire.The consideration comprises a cash sum payable on completion of £200,000 and the payment of £150,000 towards Egdon's costs of the next well to be drilled on PEDL118 or PEDL203. The effective date of the transaction is 31 December 2011.PEDL203 contains the Kirklington-3z producing well which was drilled in 2010 and produced at rates of 15-20 bopd. The Kirklington oil field has all consents and approvals in place for production but is currently shut-in awaiting development of Dukes Wood-1.The contiguous licence PEDL118 contains the abandoned Eakring-Dukes Wood oil field where the Dukes Wood‑1 well was drilled and tested in 2010, with the Ashover Grit "AG4" reservoir interval producing at rates of around 20 bopd. It is intended to dual-complete the Dukes Wood-1 well for production from the AG4 reservoir and for water disposal in the Sub Alton Crawshaw interval. The development has received planning consent and is awaiting environmental and other approvals before being brought into production in conjunction with Kirklington in the first quarter of 2012.Egdon has also identified a number of independent targets on the Eakring/Dukes Wood structure including previously undrilled highs such as Eakring North where additional wells may be drilled at some future point.The transfers of interest are subject to amongst other things approval by the Department of Energy and Climate Change.Following completion the interests in the licences will be as follows:PEDL118Egdon Resources U.K. Limited50%Terrain Energy Limited25%Nautical Petroleum AG15%Angus Energy Eakring Development Ltd10%PEDL203Egdon Resources U.K. Limited50%Terrain Energy Limited25%Nautical Petroleum AG15%Angus Energy Kirklington Development Ltd10%Commenting on the sale Egdon's Managing Director Mark Abbott said:
"This transaction provides a useful cash injection to Egdon ahead of the development of the Dukes Wood-1 well which is expected towards the end of first quarter of 2012. The deal also provides Egdon with a substantial carry on the next well to be drilled in the area."
Appointment of Director
Egdon Resources PLC (AIM:EDR) is pleased to announce the appointment of Jerry Field as Exploration Director with immediate effect. Jerry has been employed as Exploration Manager at Egdon since February 2011.Jeremy James Field, 56, graduated from Leeds University in 1977 and has since gained over 30 years’ oil industry experience working in small-to-medium sized independent Exploration and Production companies (including Weeks Petroleum, Triton, Ranger, Canadian Natural Resources, Toreador and Northern Petroleum). Jerry has a breadth of experience of exploration in Europe, Africa, the Middle East and the Indian subcontinent and has spent a good proportion of his career working in Egdon’s core areas of the UK Onshore and France. As a result of his far-reaching experience, Jerry has developed a wide range of contacts throughout the industry, and has significant experience in managing exploration projects at all levels.Jerry currently has no other directorships and there is no further information to be disclosed under Rule 17 or paragraph (g) of Schedule 2 of the AIM Rules for Companies. Jerry Field does not hold any Ordinary Shares in the Company.Commenting in the appointment, Mark Abbott, Managing Director of Egdon said;
“I am delighted that Jerry has agreed to this appointment, which strengthens the executive representation on the Board. Jerry is highly respected in the industry and brings a wealth of experience, particularly in our core areas of operation, and he will be instrumental in developing the businesses as we begin a more active exploration phase.”
Results of Annual General Meeting
Results of Annual General Meeting
The Directors of Egdon Resources plc are pleased to announce that at the Annual General Meeting held at the offices of Buchanan at 11.30 am on 8 December 2011 all resolutions put before the meeting were duly passed.
At the meeting the Managing Director Mark Abbott presented a review of the business and its plans for 2012 which is now available on the Company's website www.egdon-resources.com.
Posting of Annual Report and Accounts
Egdon Resources plc is pleased to advise that the Annual Report and Accounts and AGM Notice have been posted to shareholders today. A copy of the document is also now available on the Egdon website (www.egdon-resources.com)2011 Annual Report and Accounts and AGM Notice
Farm-out of interest in PEDL206
Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement to farm-out an interest in Nottinghamshire licence PEDL206 to Angus Energy Kelham Hills Limited ("Angus"). Under the terms of the agreement, Angus will acquire a 50 per cent interest in the licence from Egdon in return for carrying the Company for 15 per cent of the costs of two well's or 25 per cent of the cost of a single well. The wells or well are to be drilled during the initial term of the licence, which ends on 30 June 2014. As part of the agreement Angus will also assume operatorship of the licence. Following completion, Egdon will retain a 25% interest in the licence.PEDL206 was awarded in the 13th Onshore Licensing Round in 2008 and is located immediately to the east of PEDLs 118 and 203 which contain the Company's Dukes Wood-1 and Kirklington-3z oil wells that are due to resume production in 2012. The licence contains the Kelham Hills abandoned oil field, which produced two million barrels of oil between 1941 and 1957. A number of leads and prospects have been defined on existing seismic data which will be the focus of future exploration activity.The assignment and change of operatorship are subject to approval from the Department of Energy and Climate Change (DECC).Egdon's Managing Director, Mark Abbott, commented:
"Whilst containing a number of leads and prospects close to known oil production, their potential size means that PEDL206 is not a priority for the Company. This transaction enables Egdon to maintain an interest in the area whilst limiting the required financial and management resources. This farm-out is an example of our stated strategy of concentrating our resources on fewer higher potential projects as the Company develops."
Notification of Results
Egdon Resources plc (AIM:EDR) the UK-based onshore exploration and production company primarily focused on the hydrocarbon-producing basins of the UK and Europe, announces that its Preliminary Results for the year ended 31 July 2011 will be announced on Monday 7 November 2011.An analyst meeting will be held at 9.30am on 7 November 2011 at the offices of Buchanan, 3rd Floor, 107 Cheapside, London, EC2V 6DN
Completion of Sale of Interests in the Avington Oilfield
Further to the announcement on 1 August 2011 and following approval by the Department of Energy and Climate Change, Egdon is pleased to report the completion of the sale of a 10% interest in the Avington oil field under licence PEDL070, for a consideration of £400,000 in cash.Under the transaction, Egdon Resources Avington Limited ("ERA") has sold a 5% interest to IS E&P Limited and a 5% interest to IS NV Limited. The consideration paid by each company was £200,000 in cash and the assumption of their pro-rata shares of a Net Profit Interest ("NPI") payable to Heyco Energy Holdings S.L.The Avington oil field is located in the County of Hampshire and is operated by Star Energy Oil UK Limited. Oil is currently produced from the Jurassic age Great Oolite reservoir from two wells, Avington-2Z and Avington-3Z.Egdon retains an aggregate 26.67% interest in the licence and the Avington oil field.The proceeds of the sale will be utilised on Egdon's active UK and French exploration, appraisal and development programme where the Company believes it can generate a better return on investment.
Resumption of Ceres Production
Egdon Resources plc (EDR:AIM) is pleased to advise that gas production resumed from the Ceres gas field on 17 September 2011, following prolonged maintenance shut-down of the BP Cleeton Platform and associated infrastructure. Total field production is initially expected to be around 21 million cubic feet of gas per day. Egdon holds a 10% interest in Ceres and net Egdon production after Backout (the allocation of Ceres gas to replace the production at the Mercury and Neptune fields which have been shut-in to allow Ceres production) is expected to be around 1.2 million cubic feet of gas per day (200 barrels of oil equivalent per day).
Markwells Wood-1 Testing Update
Egdon Resources plc (EDR:AIM) note the release made today by Northern Petroleum plc ("Northern") advising that it has started operations for an extended well test of the Markwells Wood-1 oil discovery in West Sussex licence PEDL126 where Egdon hold a 10% interest.
Northern have advised that the workover rig arrived on site yesterday and that the production string is being installed prior to the installation of testing facilities to enable testing operations to begin in early October 2011.
Operations and Production Update
Egdon Resources plc (EDR:AIM) is pleased to provide an update on its UK operations and production at its year end of 31 July 2011.Egdon's production during July 2011 from the Keddington, Kirkleatham and Avington fields was 420 barrels of oil equivalent per day ("boepd").KeddingtonAt the Keddington Oil Field in Lincolnshire, licence PEDL005(remainder) (Egdon 75% interest) the Keddington-4 (K4) well was drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well during April 2011, and a total of 120 metres of the primary reservoir Unit 1 sandstone was encountered along with 65 metres of Unit 2.As reported in May the K4 well initially free-flowed oil and gas at maximum rates in excess of 200 barrels of oil per day ("bopd") and 518,000 cubic feet of gas per day with no associated formation water. Following "bleeding- off" of the gas pressure the well was put on pumped production using a down-hole sucker-rod pump and stabilised rates of around 75 bopd along with 200,000 cubic feet of gas per day were achieved by the end of June. Indications are that the pump is operating at low efficiency due to the high gas levels in the produced fluids and that the well is capable of delivering higher oil rates with greater drawdown. Options to resolve this are being investigated.The Keddington-3z well (K3Z), which had been shut-in since March 2011, was put back on free-flow production, along with continued production from K4, from the beginning of July and total oil rates have steadily increased during the month from 120 to 180 bopd (Net Egdon 135 bopd) as the gas pressure in the well has gradually been "bled-off" in a controlled manner and has been constrained by flaring capacity. Average daily production during July was 158 bopd (Net Egdon 118.5 bopd) and 850,000 cubic feet of gas per day (Net Egdon 106 boepd currently being flared).To date no formation water has been produced from either K3Z or K4 resulting in a decrease in project operating costs.We continue to pursue the best options for export of electricity from the site to minimise constraints on oil production and are integrating the results of the K4 well into a field model to enable a reassessment of the ultimate reserves for the field.KirkleathamAs previously reported the Kirkleatham gas field in PEDL068 (Egdon 40% interest) achieved first production on 19 April 2011. Following the resolution of a number of residual mechanical and control issues the field has been capable of 24 hour production since mid-May. Availability of the end-user power plant restricted production during June. However, production uptime during July has been high with production averaging 4.24 million cubic feet of gas per day ("mmcfg/d") (Net Egdon 1.7 mmcfg/d or 282 boepd). Levels of H2S have stabilised at 60 parts per million, well below design limitations.The power plant was shut-in for 7 days for routine maintenance on 30 July during which time down-hole pressure data will be retrieved from the Kirkleatham-4 well for analysis.It is planned to produce the well at between 3 and 3.5 mmcfg/d (Net Egdon 1.2 to 1.4 mmcfg/d or 200 to 233 boepd) on resumption of production to match expected power output and manage reservoir pressure.CeresThe Ceres field in block 47/9c (Egdon 10% interest) is now in a position to produce following completion of repair work on the damaged Eris umbilical and resolution of hydrate issues in the flow lines. The Ceres field was brought back on stream on 13 June 2011 and was produced with some interruptions until 26 June 2011 when the field was shut-in due to annual maintenance at the Cleeton platform. Egdon have been advised that this shut-down is likely to last for a period of around sixty days with the expectation of a restart of sustained production during September 2011. Production occurred over seven days during June 2011 and average net Egdon gas production for the period was 1.6 mmscfg/d (c. 260 boepd).Waddock CrossAt the Waddock Cross oil discovery in Dorset licence PL090 (Egdon 45%), the site is in the final stages of preparation for commencement of an Extended Well Test. Test operations are expected to start within the next two weeks and to continue for a period of up to six months. The intention is to trial a number of techniques aimed at increasing oil production in this high water cut reservoir to enable a decision to be made over a future development of this field which contains significant in place oil reserves.Markwells WoodIn West Sussex licence PEDL126 (Egdon 10%) we have been advised that well test operations at the Markwells Wood-1 oil discovery are due to commence at the end of August, subject to final DECC approval The test is planned to last a maximum of 40 days and will include acid stimulation of the reservoir. The outcome of the testing will help in determining the commerciality of the well.AvingtonThe Avington oil field in Hampshire licence PEDL070 (Egdon 26.67% interest following the recently announced sale of 10% interest in the field) continues to produce from the Avington-2z and Avington-3z wells. Net Egdon production for July was 20 bopd.Dukes Wood/KirklingtonIn Nottinghamshire licence PEDL118 (Egdon 65% interest) planning consent has been received for oil production at the Dukes Wood-1 well. Egdon are now in the process of securing the environmental permit and DECC field development approval prior to restarting the combined production from Dukes Wood-1 and Kirklington-3Z later in 2011.PEDL201 Seismic ProgrammeIn Leicestershire/Nottinghamshire licence PEDL201 (Egdon 50%) Tessla-IMC completed a 19 kilometre 2D seismic programme during May 2011 over the Burton on the Wolds Prospect which is located to the south-east of the Rempstone oil field. The processed data is currently being evaluated with a view to a drilling decision during 2012.PEDL180/182 3D Seismic ProgrammeA contract has recently been signed with Tessla-IMC for the acquisition of a 45 square kilometre 3D seismic survey over the prospective Broughton-Wressle trend in Lincolnshire licences PEDL180 & PEDL182. On current timing the survey is expected to be completed by the year end.Commenting on the recent developments, Egdon's Managing Director Mark Abbott said:
"We have made further good progress towards our long stated target of 500 boepd and achieved net Egdon production of 420 boepd during July 2011. The resumption of production at Ceres which is currently expected on conclusion of the maintenance shut-down of the Cleeton platform during September, along with the EWT at Waddock Cross should enable us to exceed our production target at this time.We also look forward to the commencement of the Markwells Wood-1 well test which will determine if the discovery is commercial."
Sale of Interest in Avington Oil Field
Egdon Resources plc (AIM:EDR) is pleased to report that its wholly owned subsidiary Egdon Resources Avington Limited ("ERA") has reached agreement to sell a 10% interest in the Avington oil field under licence PEDL070, for £400,000 in cash.Under the transaction, ERA has agreed to sell a 5% interest to IS E&P Limited and a further 5% interest in the licence to IS NV Limited (together the "IS Companies"). The consideration payable by each of the IS Companies for their respective 5% interests will comprise £200,000 in cash payable on completion and the assumption of their pro-rata shares of a Net Profit Interest ("NPI") payable to Heyco Energy Holdings S.L. The NPI varies between 5 and 10% dependent upon oil price. The effective date of the transaction is 1 June 2011.The transfers of interest are subject to approval by the Department of Energy and Climate Change.Prior to the transaction ERA held a 16.67% interest in PEDL070. Egdon Resources U.K. Limited also holds a further 20% interest in the licence meaning that on completion Egdon will retain an aggregate 26.67% interest in the licence and the Avington oil field.The Avington oil field is located in the County of Hampshire and is operated by Star Energy Oil UK Limited. Oil is currently produced from the Jurassic age Great Oolite reservoir from two wells, Avington-2Z and Avington-3Z. Production averaged approximately 70 barrels of oil per day in June 2011.The sale will reduce Egdon's daily production by a maximum expectation of 7 barrels of oil per day and reduce its Proven and Probable reserves by an estimated 23,000 barrels of oil. The contribution to net profit from the 10% interest for the eleven months to end June 2011 after depreciation and amortisation was £18,500 before tax (unaudited). The gross cash flow from the interest for the same period was £58,000 (unaudited). The carrying value of the asset sold as at 30 June 2011 was £422,390 (unaudited).The proceeds of the sale, which will total £400,000 payable on completion, will be utilised on Egdon's active UK and French exploration, appraisal and development programme where the Company believes it can generate a better return on investment.The IS Companies are private companies involved in oil and gas exploration and production. InfraStrata plc is a 50% shareholder in both companies although both companies have independent boards. Egdon directors Ken Ratcliff and Walter Roberts are also directors of InfraStrata plc and Walter Roberts and John Rix have shareholdings in the IS Companies. As such an independent committee of Egdon directors comprising Philip Stephens, Alan Booth and Mark Abbott was set up to consider the offers and negotiate and approve the transaction.Commenting on the sale Egdon's Managing Director Mark Abbott said:
"These transactions realise a significant proportion of our expected future value from the transferred interest in cash at a time of strong oil price. Egdon believes it can utilise this cash on its higher potential projects in the UK and France to provide a better return for shareholders We still retain a material interest in the Avington field and any upside which may be realised from future drilling".
UK Licence Update
Egdon Resources plc (EDR:AIM) is pleased to provide an update on changes to certain of its UK licence interests as well as details of a recent seismic survey.Egdon have reached agreement with Europa Oil and Gas Limited (“Europa”) and Celtique Energie Petroleum Ltd. (“Celtique”) to equalise working interests across contiguous Petroleum Exploration and Production Licences (“PEDL”) 180 and 182 in the East Midlands. Egdon is the current operator of PEDL182 and will assume operatorship of PEDL180. On conclusion of the transaction, which is subject to approval from the Department of Energy and Climate Change (“DECC”), Egdon will hold a 33.33% interest in both licences reducing from its current 50%. The transaction provides alignment for the planned exploration programme for this area, which contains a trend of oil prone structures including the Broughton oil discovery and Wressle Prospect, which spans the two licences. A joint 3D seismic survey is planned for later in 2011 to firm up drilling locations for the licences. It is hoped to drill during 2012 as part of a planned multi-well drilling programme in the East Midlands.Egdon have also reached agreement with Celtique whereby Celtique will acquire a 25% interest in PEDL181 from Egdon, again subject to approval by DECC. Following completion, Egdon will hold a 25% interest. Europa is the operator of PEDL181 with a 50% interest.Egdon’s interests in PEDL180 and 181 were acquired from Valhalla Oil and Gas Limited (“Valhalla”) earlier in 2011. The licences are covered by an Area of Mutual Interest agreement between Egdon and Celtique. Celtique will assume 50% of the consideration to Valhalla. This will comprise the payment of a 10% Net Profit Interest (“NPI”) on each 25% interest in PEDL180 and PEDL181 assigned to it by Egdon (2.5% net). The NPI is payable from revenues after recovery of pro-rata exploration, development and production costs.Elsewhere in the East Midlands, Egdon is pleased to report the successful completion of a 13 kilometre 2D seismic programme over the Burton on the Wolds Prospect in PEDL201 where Egdon holds a 50% operated interest. The Burton on the Wolds prospect is located on the southern margin of the Widmerpool Basin to the South-East of the Rempstone Oil Field and is a four-way dip-closed prospect associated with an underlying seismic anomaly. Indicative prospective resources are estimated by Egdon at around 1.5 million barrels.Commenting on the recent developments, Egdon’s Managing Director Mark Abbott said:
“We are pleased to have reached agreement with Europa and Celtique in relation to PEDLs 180, 181 and 182 and to have assumed operatorship of PEDL180. We are now in a position to operate the forthcoming 3D seismic programme and develop plans for drilling on this highly prospective trend with a uniform Joint Venture partnership. The early results of the seismic programme over the Burton on the Wolds Prospect look encouraging and we hope will lead to a firm drilling location.”
Keddington-4 Production Testing Update
Egdon Resources plc (EDR:AIM) is pleased to provide an update on production testing of the Keddington-4 well in Egdon’s operated licence PEDL005 (Remainder) located in Lincolnshire.The Keddington-4 well was drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, during April 2011 and encountered a total of 120 metres of the primary reservoir Unit 1 sandstone and 65 metres of Unit 2.Site reinstatement works have been completed and the Keddington-4 well commenced pumping operations on Monday 23 May 2011 at 08.30 hours. After initial recovery of kill-brine and oil-based drilling mud, the well began free-flowing oil and gas through an adjustable choke and the pump was shut-off. The well has been shut-in periodically to observe pressure behaviour. Free-flowing production over a flowing period of 68 hours to 07.30 on 27 May 2011 has yielded 647 barrels of oil along with 1,106,300 cubic feet of gas on a minimum choke setting. The production rate for the 24 hours to 07.30 hours on 27 May 2011 was measured at 234 barrels of oil per day (“bopd”) and 518,000 cubic feet of gas per day (“cfg/d”). No formation water has been observed to date.It is intended to continue to produce the Keddington-4 well over the coming few weeks to determine the optimum rate and methods of producing the well. Production from the adjacent Keddington-3z well, which was producing at constrained rates of 100 bopd and 650,000 cfg/d prior to being shut-in during the drilling operations, will resume in the coming weeks once stable production has been established from Keddington-4.We will provide further updates once stable oil and gas rates for the field are established.Egdon holds a 75% operated interest in PEDL005(Remainder). The joint venture partners are Terrain Energy Limited (15%) and Alba Resources Limited (10%), a wholly owned subsidiary of Nautical Petroleum plc (AIM: NPE).Commenting on the production testing operations, Egdon’s Managing Director Mark Abbott said:
“We are pleased by these initial production results from the Keddington-4 well. The good oil rates, lack of any observed formation water and current gas production from the well are all encouraging. We will continue to flow and monitor the well over the next few weeks as we look to define the optimum production strategy for the well and the field as a whole.”
Planning Decision – Holmwood-1 Exploration Well
The Board of Egdon Resources plc (AIM:EDR) notes the release made today by Europa Oil and Gas (Holdings) plc (“Europa”) advising of yesterday's decision of the Planning Committee of Surrey County Council to refuse planning permission for the UK onshore Holmwood-1 exploration well.Europa also advised that the combination of the very close voting result and the recommendation by the Planning Officers to allow the drilling, following an exhaustive review of the application, gives the Directors and partners sufficient justification to appeal this decision on the grounds that the decision to refuse was not made purely on the facts of the case.Holmwood is situated in PEDL143 where Egdon holds a 38.4% interest. The joint venture partners are Europa Oil & Gas Ltd (Operator) (40%), Warwick Energy (20%) and Altwood Petroleum Limited (1.6%).
Update on operations at Kirkleatham and Keddington
Egdon Resources plc (AIM: EDR) today provides an update on operations at two key UK projects.The Board is pleased to report that first gas flows were achieved on 19 April 2011 at the Kirkleatham gas development in PEDL068 where the Company holds a 40% operated interest. The joint venture partners are Sterling Resources (UK) Ltd (47%), Yorkshire Exploration Limited (8%) and Montrose Industries Limited (5%).During the early stages of production from the field, gas flow rates and their duration will be restricted as system performance and gas quality is monitored and training undertaken of the site operatives. It is expected that flow rates will be gradually ramped up to the maximum of around 5 million cubic feet of gas per day and 24 hour operations will commence in the coming weeks.The gas from Kirkleatham is sold to Sembcorp Utilities (UK) Limited, the operator of the Wilton site for use in their GT2 gas turbine power plant.The Board also reports that drilling operations have now been completed at Keddington-4 in Lincolnshire licence PEDL005(Remainder) where Egdon holds a 75% operated interest. The joint venture partners are Terrain Energy Limited (15%) and Alba Resources Limited (10%), a wholly owned subsidiary of Nautical Petroleum plc (AIM: NPE).The Keddington-4 well was drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, which was drilled by Candecca Resources in 1998. The British Drilling and Freezing Limited BDF28 drilling unit mobilised to site on 1 April and operations began on 4 April. The plugging-back of the existing well was completed and the drilling of the sidetrack commenced at 0700 hours on 9 April from a kick-off depth of 2080 metres. The well reached its total depth of 2468 metres at 1800 hours on 22 April. A total of 120 metres of the primary reservoir Unit 1 sandstone with high gas readings indicative of the presence of oil was penetrated some 6 metres shallower than in the Keddington-1Z well. An additional 65 metres of Unit 2 was also drilled. Due to borehole stability concerns, it was decided not to deepen the well as planned to penetrate the "Namurian" sandstones, which had gas indications in Keddington-3. Keddington-4 has now been completed for pumped production with a slotted liner over the entire horizontal section of the well. Once the drilling rig has demobilised from site later this week all surface facilities will be reinstated and the well put into production. Production from the adjacent Keddington-3z well, which has been suspended for safety reasons during the drilling operations, will resume once Keddington-4 has been tested.Commenting on these developments Egdon's Managing Director Mark Abbott said:
"Having achieved the milestone of first gas at Kirkleatham, we now look forward to achieving optimum production rates in the coming weeks. The presence in Keddington-4 of a significant section of Unit 1 reservoir up-dip of the Keddington-1Z well is encouraging and we look forward to the results of production from this well during early May."
Commencement of Keddington-4 drilling operations
Egdon Resources plc (AIM:EDR) is pleased to announce the start of drilling operations at the Keddington oil field on Lincolnshire Licence PEDL005(Remainder).Egdon holds a 75% interest in and is operator of the PEDL005(Remainder) licence. The joint venture partners are Terrain Energy Limited ("Terrain"), holding a 15% interest and Alba Resources Limited ("Alba"), a wholly owned subsidiary of Nautical Petroleum plc (AIM: NPE), with a 10% interest.The Keddington-4 well will be drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, which was drilled by Candecca Resources in 1998. This oil production well has been shut-in since the drilling of Keddington-3 and 3Z in April 2010. Keddington-4 is planned to penetrate approximately 200 metres of producing Unit 1 sandstone in a new horizontal section. The well is also planned to penetrate the deeper "Namurian" sandstones, which had gas indications in Keddington-3 to provide additional information on this potential gas bearing zone.The British Drilling and Freezing Limited BDF28 drilling unit began mobilising to the site on 1 April and operations began on 4 April. The plugging-back of the existing well has been completed and the drilling of the sidetrack commenced at 0700 hours on 9 April from a kick-off depth of 2080 metres. The well is intended to be drilled directionally to a total measured depth of around 2750 metres. Drilling and completion operations are expected to last a total of around three weeks.The well is expected to be completed for free-flowing or pumped production using the existing surface production facilities shortly after the rig is released from the site.Keddington-4 is designed to increase total field production at a time of high oil prices and provide additional reservoir information in an untested part of the structure to factor into the investment decision on the scale of the gas to electricity generation project planned for the field. This is expected to provide an important additional revenue stream and eventually will enable unconstrained production of oil from the field.Production from the adjacent Keddington-3z well has been suspended for safety reasons during the drilling operations and will resume once the rig has been demobilised from site and the flow characteristics of Keddington-4 has been determined.A further announcement will be made at the conclusion of operations.
Update on UK Operations
The Board of Egdon Resources plc (EDR:AIM) today provides an update on the progress of operations at three key UK projects.Following weather related delays through December, the Company can report that all civil, mechanical and electrical construction has now been completed at Egdon's operated Kirkleatham gas development in PEDL068 where the Company holds a 40% interest. Final snagging and pre-commissioning activity is nearing completion and we anticipate commissioning and first gas within the next few weeks. We will provide a further update to shareholders once first gas is achieved.As previously reported the prolonged maintenance shut-down of the BP Cleeton Platform and associated infrastructure has meant that the Ceres Gas Field (of which Egdon holds a 10% interest) has been shut-in since June 2010. Egdon is pleased to advise that these works are now approaching completion. However, during recent testing of the Ceres/Eris production systems anchor damage was discovered to the Eris umbilical and a repair is underway to allow gas flows from the fields to be resumed. The operator, Centrica, is progressing these repairs as a priority and has advised that work should be completed around mid-April. Assuming a successful conclusion to other outstanding works it is therefore anticipated that gas production from Ceres will resume a few weeks afterwards.The Company also advises that it expects to commence further drilling operations at the Keddington oil field, in Lincolnshire licence PEDL005 (Remainder), in early April. The planned Keddington-4 well will be a horizontal sidetrack from the Keddington-1Z donor well at a kick-off depth of 2080 metres and will be drilled to a total depth of around 2750 metres, which will include a horizontal section of up to 500 metres. This well is designed to increase total field production at a time of high oil price and provide additional reservoir information in an untested part of the structure to enable the investment decision on the scale of the gas to electricity generation project. This is expected to provide an important additional revenue stream and eventually enable unconstrained production of oil from the field. We will provide further details of the well at commencement of operations. Production from site will be shut-in for the duration of these operations which are expected to last around 30 days.Commenting on the update Egdon's Managing Director Mark Abbott said:
"We share our shareholders' frustrations with the delays to production at Kirkleatham and Ceres. With the anticipated start-up of production at Kirkleatham, further drilling at Keddington and the eventual restoration of production at Ceres expected towards the end of April we can look forward to a significant increase in production and revenues within the next two months."
Notice of Results
Egdon Resources plc (AIM:EDR) the UK-based onshore exploration and production company primarily focused on the hydrocarbon-producing basins of the UK and Europe, announces that its Interim Results for the 6 months ended 31 January 2011 will be announced on 19 April 2011.An analyst meeting will be held at 9.30am on 19 April 2011 at Buchanan Communications, 3rd Floor, 107 Cheapside, London, EC2V 6DN.
Completion of Acqusition of Onshore Licence Interests from Valhalla Oil and Gas UK Limited
Egdon Resources plc (AIM:EDR) is pleased to report that further to the announcement of 28 January 2011 it has now completed the acquisition from Valhalla Oil and Gas UK Limited (“Valhalla”) of their entire 50% interests in UK Petroleum Exploration and Development Licences (“PEDLs”) 180 and 181.The consideration for the acquisition is the grant to Valhalla of a Net Profit Interest (“NPI”) of 10% of the assigned 50% interest in each of the licences.PEDL’s 180 and 181 are located in the county of Lincolnshire and are operated by Europa Oil and Gas. They are situated adjacent to Egdon’s operated licences PEDL182 and PEDL241 where the Company holds a 50% interest. PEDL180 contains the Wressle Prospect which extends into PEDL182 where the Broughton oil discovery is located. This oil prone trend of structures is bounded to the north-west by the Crosby Warren producing oil field and the Brigg oil discovery to the south-east. PEDL181 contains a number of potential leads defined on 3D seismic data which will be further evaluated.Both licences are subject to a drill or drop decision later this year.Commenting on the acquisition Egdon’s Managing Director Mark Abbott said:
“We are pleased to have completed this acquisition which is in line with our UK onshore growth strategy. We are currently developing plans for possible 3D seismic acquisition over the Broughton-Wressle structures during 2011 to firm up potential drilling locations in this highly prospective trend.“
Holding in Company
The Company was notified today that, as a result of a disposal of 130,000 ordinary shares in Egdon on 14 March 2011, Andrew Hindle now holds 6,529,232 ordinary shares (with an equivalent amount of voting rights) in the Company which represents approximately 4.99 per cent. of the issued ordinary share capital of the Company.
Planning approval for Nooks Farm drilling operations
Egdon Resources plc (AIM:EDR) is pleased to announce that it has been advised by Seven Star Natural Gas Ltd ("Seven Star"), the farm-in partner on Staffordshire licence PEDL141, that planning permission was granted by Staffordshire County Council for the re-entry and testing of the Nooks Farm-1A well at a planning committee meeting held on 3 February 2011.The Nooks Farm accumulation was discovered by Shell in 1982, with the Nooks Farm-1A well encountering gas bearing sandstones of Carboniferous age at a depth of 430m relative to sea level. The well achieved a maximum flow rate of 1.12 million cubic feet of gas per day on test. Estimates of the volumes of gas in place at Nooks Farm have been independently assessed as being in the range of 0.88 to 3.83 billion cubic feet of gas. It is proposed to re-enter the Nooks Farm-1A well and produce gas for on-site electricity generation with export via an underground cable to the National Grid.Under the terms of a Farm-in Agreement the drilling will be operated by Seven Star, a wholly owned subsidiary of UK Onshore Gas Limited.Egdon holds a 46% interest in the licence and will be carried through the planned drilling programme.Egdon will provide an update on the timing of operations in due course.The licence interests in PEDL141 are:Egdon Resources Plc – 46%Seven Star Natural Gas Limited – 50%Altwood Petroleum Limited – 4%Commenting on the news Egdon's Managing Director Mark Abbott said:
"We are pleased to receive consent for our planned re-entry of the Nooks Farm-1A gas discovery well and now look forward to Seven Star progressing plans for drilling and testing operations which we expect to be completed by September of this year. The proposal for low impact operations has enabled us to gain planning consent where previous operators have failed. Given a successful outcome to the operations we believe that Nooks Farm could make a contribution to revenues as early as 2012."
Acquisition of UK Onshore Licence Interests from Valhalla Oil and Gas UK Limited
Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement to acquire the entire interest of Valhalla Oil and Gas Limited (“Valhalla”) in two onshore UK Petroleum Exploration and Development Licences (“PEDLs”). The interests to be acquired comprise 50% of PEDL180 and 50% of PEDL181, which are located in the East Midlands Petroleum Province in the County of Lincolnshire. The consideration for the acquisition will be the grant to Valhalla of a Net Profit Interest (“NPI”) of 10% of the acquired interest in each of the licences. The NPI will be payable from any revenues after recovery of allowable exploration, development and production costs.PEDL180 and 181 were awarded in the 13th UK Landward Licensing Round in 2008 and are located adjacent to Egdon’s operated licences PEDL182 and PEDL241 where the Company holds a 50% interest. PEDL180, covering an area of 100 square kilometres, contains the Wressle Lead, mapped as extending into Egdon’s existing PEDL182 and located to the South East of the Crosby Warren producing oil field and between oil discoveries at Brigg and Broughton . PEDL181, located to the East of Egdon’s existing licences, is a large licence covering over 540 square kilometres and contains among other interesting structures the Caistor Lead, defined on 3D seismic data. Both licences are operated by Europa Oil and Gas and are subject to a drill or drop decision during 2011.The acquisition is subject to regulatory approval from the Department of Energy and Climate Change (DECC), and approval from the joint venture partner.Commenting on the acquisition Egdon’s Managing Director Mark Abbott said:
“The acquisition of these licences from Valhalla provides Egdon with access to further high potential acreage in one of our core exploration areas and reinforces our UK onshore growth strategy.“
Issue of Equity and Total Voting Rights
Egdon announces that pursuant to the exercise of options granted under the Company's Enterprise Management Incentive Scheme, 111,317 ordinary shares of 10 pence have been issued and allotted.Application has been made for the new ordinary shares to be admitted to trading on AIM and admission is expected to take place on 25 January 2011.The new ordinary shares will rank pari passu with the existing shares of the Company. Following this allotment, the total issued share capital of the Company will increase to 130,869,094 ordinary shares with an equal amount of voting rights and no shares held in treasury.
Egdon Resources plc (AIM:EDR) announces that Andrew Hindle is to step down from his role as a non-executive Director of the Company with effect from 1 February 2011. Andrew, along with Mark Abbott, co-founded Egdon Resources in 1997 and has been a Director since this time. He was instrumental in the development of Egdon's gas storage business and became the CEO of Portland Gas plc (now InfraStrata plc) on its demerger from Egdon in January 2008. Andrew has been a non-executive Director of Egdon since that time.Commenting on Andrew's resignation, Philip Stephens, the Chairman of Egdon Resources said:
"On behalf of the Board I would like to offer my thanks to Andrew for his significant contribution to the development of Egdon over the last thirteen years. In his role as a non-executive Director over the past three years his contribution has always been constructive and informative. Andrew believes that now is the time for him to concentrate on InfraStrata and we wish him every success with these endeavours".
Oil in Markwells Wood-1 Well Confirmed
The Directors of Egdon Resources plc (AIM:EDR) are pleased to note the statement made today by Northern Petroleum plc ("Northern") the operator of the Markwells Wood-1 well in Sussex licence PEDL126, where Egdon's wholly owned subsidiary Egdon Resources U.K. Limited holds a 10% interest. The statement read as follows:“Northern announces that assessment of the logs has confirmed that the entire Great Oolite drilled reservoir sequence in Markwells Wood-1 is oil bearing above the Horndean Field oil water contact of 4446 feet sub-sea level (TVD SS), meeting the primary objective.The presence of mobile (“live”) oil was observed when the 30 feet of core was extracted from the well. Initial analysis of the logs indicate the well, which was deviated at an inclination of approximately 56 degrees through the Great Oolite, penetrated a gross hydrocarbon bearing interval of 275 feet with a calculated net reservoir of 192 feet with an average porosity of 13-14%, a typical porosity value for this reservoir in the nearby fields in the same formation. The top of the Great Oolite was encountered 51 feet low to prognosis and the Great Oolite vertical thickness was 146 feet compared to a prognosis of 240 feet.The analysis of the core is currently underway and that data will be integrated with the petrophysical evaluation and image logs to design the testing programmes.Testing to establish pressures and flow rates in the existing wellbore will take place when the required services and equipment have been contracted. Testing operations will be conducted utilising a work-over rig at a lower day rate cost. Analysis of the result will enable the determination of the oil reserve potential and will be the basis for production planning.”The Licence Partners in the Markwells Wood-1 well are:Northern Petroleum (GB) Limited (operator)50%Magellan Petroleum (UK) Limited40%Egdon Resources U.K. Limited10%