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Egdon Resources plc (AIM:EDR) is pleased to advise that further to the announcement of 20 December 2022 it has completed the acquisition of the entire issued share capital of Aurora Production (UK)Limited (“Aurora Production”) from Aurora Petroleum Limited (the “Vendor”).

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Aurora Production is a private company, which holds an 18.75% interest in the Edgon operated licence PL090 which contains the Waddock Cross oil field and an 8.33% interest in the IGas operated licence PEDL070which contains the Avington oil field.

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Egdon’s interest in the Waddock Cross oil field (PL090)increases to 73.75% and to 56.04% in the remaining parts of PL090 (excluding the Waddock Cross oil field). Waddock Cross is currently shut-in.  Independent reservoir modelling has shown that a new horizontal well on the field could yield commercial oil production (500-800 bopd). Given the significant mean in-place oil volume of c. 57 million barrels, this asset has been high graded by Egdon for redevelopment.

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Egdon has increased its holding in the Avington oil field to 36.33%.  Avington remains shut-in, with work ongoing to redevelop the field during H1 2023.

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Egdon estimates that the transaction adds approximately 0.614 million barrels of Best Estimate Contingent and Prospective Resources of oil to its resource inventory.

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The consideration for this acquisition is the assumption by Egdon of all ongoing liabilities on these licences, including all abandonment liabilities, from the commercial date of the transaction, which is 30 September2022.

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As part of the transaction Egdon has received a cash sum from the Vendor of £0.288 million, less the interim period costs, which reflects the current estimate in relation to the abandonment liabilities. Aurora Production has also granted Net Profit Interests to the Vendor of 10% on each of the licence interests.  In the event that profitable production is established, the Vendor will be reimbursed the £0.288 million.

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Aurora Production also has accumulated upstream ringfenced tax losses of ca. £90 million that should be available to offset tax on future profits.

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Commenting on the acquisition, Mark Abbott, Managing Director of Egdon said:

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“We are pleased to have completed this acquisition, which builds on our existing interests in the Waddock Cross and Avington oil fields. Both assets have active plans in place to rejuvenate oil production.  The acquisition therefore adds potential for near-term incremental production, adds to our resource base and delivers substantial tax losses that may be utilised to offset future taxes.”

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Egdon Resources plc (AIM:EDR), the UK Energy Company, is pleased to advise that it has entered into a Farmout Option Agreement (the “Agreement”) with York Energy (UK) Holdings Limited (“York”) relating to onshore Production Licence PL081 (the “Licence”) in North Yorkshire.

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The Licence contains the Weaverthorpe Prospect (“Weaverthorpe”). Weaverthorpe is a relatively shallow Bunter Sandstone (Triassic) prospect located immediately up-dip of interpreted gas pay in the Fordon-2 well (drilled by BP in 1974). Egdon’s initial evaluation indicates an estimated Mean prospective gas resource of 58 billion cubic feet.

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Under the terms of the Agreement Egdon has a period of six months from 3 February 2023 to elect to farm into the Licence (the “Option”). During the Option period, Egdon will undertake additional technical and operational work to de-risk the opportunity, including reprocessing of the vintage 2D seismic data and integration of this with the existing 3D seismic data which defines the western part of the prospect.

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As consideration for the grant of the Option, Egdon will pay 100% of the 2023 licence fees.

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Should Egdon exercise the Option, it will earn a 70% interest in the Licence and assume operatorship. As consideration Egdon will pay 100% of the costs associated with the planning, drilling, logging, and either short term testing and completion or plugging and abandonment of a well to test the Weaverthorpe Prospect.

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In addition, on exercise of the Option, Egdon will pay York a cash sum of £100,000, less any licence fees that were paid by Egdon for 2023.

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York has an agreement with the current operator, Third Energy UK Gas Limited (“Third”), entitling it to be assigned the entire legal and beneficial interest in PL081. Egdon will pay 100% of the costs associated with the transfer of the Licence from Third to York and to Egdon (Such transfer being subject to NSTA approval.)

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Commenting on the Agreement Mark Abbott, Managing Director of Egdon, said:

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“This farmout option for the Weaverthorpe Prospect represents a significant opportunity for Egdon to increase its exposure to a potentially material gas resource at a time when the UK’s reliance on imported energy has come into sharp focus.  

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The deal structure secures the opportunity at low cost whilst we undertake additional technical due diligence through the application of modern seismic processing technology.  

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We look forward to updating shareholders on this exciting opportunity over the coming period.”

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Egdon Resources plc (AIM: EDR) the UK Energy business is pleased to announce that at the Annual General Meeting held at 11.30 hours today all the resolutions proposed in the notice of the meeting were duly passed.

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A business update presentation was made immediately following the AGM and is now available on the Company's website www.egdon-resources.com

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The detailed voting results and proxy appointments arein the link below:

Revenue

The Company’s revenue continue to be strong with unaudited revenue for the five-month period from August to December 2022 of £3.08 million (2021: £2.07 million).

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Operations

Progress is being made across Egdon’s entire portfolio of assets, highlights include:

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Wressle

·        Cumulative oil production of more than 341,100 barrels to 12 January 2023, with no water

·        Current daily production rate of approximately 825-850 barrels of oil per day (“bopd”), however, a daily rate of in excess of 1,000 bopd was achieved in late December 2022, following a four day shut-down

·        Three microturbines have been delivered to site and installation and commissioning is ongoing

·        The microturbines will generate all site electricity and are expected to enable up to a 20% uplift in oil production

·        3D seismic reprocessing completed and new field interpretation being finalised to confirm final target locations for future appraisal and development drilling

·        New Competent Persons Report to be commissioned incorporating the new field interpretation and exceptional production performance

·        Planning and permitting process for Penistone Flags development has commenced

·        Drilling of a Penistone Flags development well is planned for H2 2023, subject to receipt of regulatory and planning consents

·        Progressing gas to wire, and gas export options to generate further revenue streams and to eliminate gas incineration at Wressle

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Keddington

·        Reprocessing of existing 3D seismic data currently being finalised to inform final sub-surface location for a side-track well to target around 160,000 barrels of incremental oil production

·        Planning consent and permits in place to enable drilling during H2 2023

Avington

·        All planning conditions have been discharged and the operator is planning to restart production during H1 2023

·        Egdon will increase its interest in the field to 36.33% on completion of the acquisition of Aurora Production Limited

Waddock Cross

·        Egdon will increase its interest in the field to 73.75% on completion of the acquisition of Aurora Production Limited

·        Planned redevelopment of the Waddock Cross oil field

·        The Company is progressing planning and permitting to secure consents for drilling with the target of H1 2024

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Biscathorpe

·        A Planning Hearing was held on 11 October 2022 and the Inspector’s decision is awaited

·        Preparations for drilling in H2 2023 would follow from a successful planning appeal

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North Kelsey

·        Egdon submitted a planning appeal in August 2022 and we have been informed that the appeal will be held as a Hearing with the detailed timing awaited from the Planning Inspectorate  

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Resolution and Endeavour (P1929 and P2304)

·        Shell has completed its withdrawal from the P1929 licence and Egdon is now operator with a 100% interest

·        P2034(Endeavour) was surrendered in November 2022

·        The nearby, analogous Pensacola Prospect has discovered gas and a testing programme is underway

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Updated Corporate Presentation

An updated corporate presentation, including updates as detailed above, will be made following the AGM and will be available on the Company's website at www.egdon-resources.com

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Mark Abbott, Managing Director of Egdon, commented:

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“Egdon continues to generate strong revenues from its UK producing assets with Wressle being the standout asset, performing ahead of expectations. We anticipate a further uplift in production at Wressle in the near future once the microturbines are fully commissioned and operational. We are actively progressing planning and permitting for the development of the Penistone Flags reservoir, which along with the associated gas to grid project will result in a further material uplift in production and revenues.

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Elsewhere, we are progressing our plans for a drilling campaign during the next 12 to 24months designed to further increase our production and revenue and funded from the material cash flow being generated from our existing production.”

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Egdon Resources plc advises that updated and corrected documentation has been produced in respect of the Annual General Meeting (“AGM”) of the Company to be held on Tuesday 17 January 2023 at 11.30 a.m. at the offices of Norton Rose Fulbright, 3 More London Riverside, London SE1 2AQ, United Kingdom.

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Notice of availability of these documents has been sent to members and these documents are available on the Company’s website at www.egdon-resources.com.

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Any proxies already submitted will remain valid for the AGM unless superseded by a new proxy.

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Egdon Resources plc (AIM:EDR) is pleased to announce that it has signed a conditional agreement to acquire the entire issued share capital of Aurora Production (UK) Limited (“Aurora Production”) from Aurora Petroleum Limited (the “Vendor”). Aurora Production is a private company, which holds an 18.75% interest in the Edgon operated licence PL090 which contains the Waddock Cross oil field and an 8.33% interest in the IGas operated licence PEDL070 which contains the Avington oil field.

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The consideration for this acquisition will be the assumption by Egdon of all ongoing liabilities on these licences, including all abandonment liabilities.  However, as part of the transaction Egdon shall receive a cash sum from the Vendor of £0.288 million which reflects the current estimates in relation to these liabilities.  Aurora Production will at the completion of the transaction grant Net Profit Interests to the Vendor of 10% on each of the licence interests which, in the event that profitable production is established, will result in the Vendor being reimbursed the sum it gave Egdon to cover the abandonment liabilities for such licence.

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Aurora Production has accumulated upstream ring fenced tax losses of ca.£90 million that should be available to offset tax on future profits. The commercial date of the transaction will be 30 September 2022. The transaction is subject to approval of the change of control by NSTA and the other licensees.

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Egdon has an existing 55% operated interest in the Waddock Cross oilfield (PL090) which will increase to 73.75% on completion. In addition, Egdon will increase its interest in the remaining part of PL090 (excluding the Waddock Cross oil field) from 42.50% to 56.04%. Waddock Cross is currently shut-in.  Independent reservoir modelling has shown that a new horizontal well on the field could yield commercial oil production (500-800 bopd). Given the significant mean in-place oil volume of c.57 million barrels, this asset has been high graded by Egdon for redevelopment.

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Egdon will increase its holding in the Avington oil field from 28.00% to 36.33%.  Avington remains shut-in but planning consent to restart production was granted on appeal in December 2021. The forward plan is to redevelop the field during 2023 with longer term plans to include establishing on site water handling facilities.

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Egdon estimates that the transaction covering both licences will add approximately 0.614 million barrels of Best Estimate Contingent and Prospective Resources of oil to its resource inventory.

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Commenting on the acquisition, Mark Abbott, Managing Director of Egdon said:

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“This acquisition builds on our existing interests in the shut-in Waddock Cross and Avington oil fields. Both assets have active plans in place to rejuvenate oil production.  The acquisition therefore adds potential for near-term incremental production, adds to our resource base and delivers substantial tax losses that may be utilised to offset future taxes.”

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Egdon Resources plc advises that the Annual General Meeting (“AGM”) of the Company scheduled to be held on Tuesday 13December 2022 at 11.30 a.m. is to be postponed and will now be held on Tuesday17 January 2023 at 11.30 a.m. at the offices of Norton Rose Fulbright,3 More London Riverside, London SE1 2AQ, United Kingdom.

The original notice of the AGM was sent to Shareholders on 17 November 2022. Since then the RMT union has announced a series of 48-hour rail strikes for 13-14 and 16-17 December and 6-7January 2023. The AGM has to be held before the end of January 2023 and your Board believes that it is in the best interests of all stakeholders that this flexibility should be used to postpone the AGM to a date which is, at least at the moment, not scheduled to be affected by any such strike action.

A detailed notice for the postponement and rescheduled AGM, along with a revised Form of Proxy is being sent to members and these documents will be available on the Company’s website at www.egdon-resources.com.

Save for the new date for holding the AGM, the date when the Register of Members will close and the date by which proxies need to be lodged, all details of the earlier notice of 17 November 2022 remain unchanged.

Proxies already submitted will remain valid for the new date of the AGM unless superseded by a new proxy.

The Board regrets any inconvenience caused.

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Egdon Resources plc is pleased to announce that its 2022 Annual Report and Accounts and AGM Documentation are now available on its website at www.egdon-resources.com.To access the documents, select Shareholder under the Investors dropdown list or alternatively, use the following link at www.egdon-resources.com/investors-2/shareholder-communication.  

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Egdon Resources plc (AIM: EDR), a UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK, today announces its preliminary results for the year ended 31 July 2022.

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Operational and Corporate Highlights

Egdon net production during the period increased by 160% to 84,894 barrels of oil equivalent (“boe”) equating to 233 boe per day (“boepd”) (2021: 32,686 boe, 90boepd).

Wressle production has significantly exceeded forecast expectations with average gross production during the period of 656 barrels of oil per day (“bopd”) at rates constrained by the EA Permit limits for gas disposal and with zero water production to date.

The Ceres gas field is providing a late life renaissance due to the high gas price and low operating costs.

Following the refusal of planning permission in November 2021 for the drilling of aside-track well, testing and long-term production at the Biscathorpe project, an appeal was submitted in April 2022.

On 8 March 2022 a revised incentive package was put in place for all employees through the issue of new share options and the cancellation of all historical share options.

On 14 March 2022, planning permission was refused to extend the existing consents to drill the North Kelsey-1 exploration well and an appeal was submitted in April 2022.

On 5 April 2022, the Government announced that it had commissioned the British Geological Survey to advise on the latest scientific evidence around shale-gas extraction.  Report delivered to BEIS on5 July 2022.

During April 2022, Shell advised Egdon of its intention to withdraw from licencesP1929 and P2304, containing the Resolution and Endeavour gas discoveries. Egdon applied to the NSTA for an extension of time to complete the 3D seismic programme.

Egdon has assumed the operatorship of PEDL343, increased its equity to 40% and agreed an extension to 20 March 2024. PEDL343 contains the Cloughton gas discovery.  

LicencesPEDL202 and PEDL130 were relinquished during the period.

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Financial Performance

Oil and gas revenues increased by over 530% during the period to £6.91 million (2021: £1.09 million) as a result of significantly increased production and strengthening commodity prices.

Earnings before interest, tax, depreciation, amortisation, asset impairments, impairment reversals and write-downs were £4.67 million (2021: loss of £0.72 million).

Post tax profit for the period of £3.30 million including£1.40 million of impairment reversals, £1.80 million of impairments and £0.15million of write-downs and pre-licence costs (2021: loss of £1.68 million including £0.48 million of write-downs, pre-licence costs and impairments).

Basic earnings per share of 0.64p (2021: loss per share of0.51p). Diluted earnings per share of 0.57p (2021: loss per share of 0.51p).

Net current assets of £4.90 million (31 July 2021: £0.14) of which cash and cash equivalents were £4.80 million (31 July 2021: £1.96million).

The Company has no borrowings following the repayment of a£1 million loan during May 2022.

Subsequent Events

On 8 August 2022 the North Kelsey Planning appeal documentation was submitted.

On 8 September 2022 the Government announced the lifting of the moratorium on hydraulic fracturing for shale-gas.

Egdon was advised in October 2022 that the NSTA had consented to Egdon’s request for a twelve-month extension to the P1929 licence obligation to acquire the 3D seismic. Egdon will now engage with the NSTA to confirm the detailed expectation in relation to this and subsequent timelines. Should the 3D survey not be acquired by April 2023, P1929 will determine in May 2023. Licence P2304 will be relinquished.

A hearing was held on 11 October 2022 in relation to the Biscathorpe planning appeal and we now await the Planning Inspector’s decision.

On 27 October 2022 the Government reintroduced the moratorium on hydraulic fracturing for shale-gas.

Coincident with the release of its Preliminary Results, the Company has updated its corporate identity and released a new website (https://www.egdon-resources.com/).

Outlook

Post-period-end production and revenues have continued to be strong with unaudited August to October 2022 revenues of £2.07million.

The key operational focus for the coming period will be:

Maintaining and enhancing the strong production performance at Wressle whilst progressing both the gas monetisation and Penistone Flags development as priorities.

To add reserves, production and revenues through the drill-bit in both our exploration and development/re-development projects.

To progress energy storage, hydrogen and renewable generation projects.

Audiocast

The Company will host a live audiocast of the Results Presentation via the Investor Meet Company at 10:00am on 8 November. Investors can sign up to Investor Meet Company for free and add to meet EGDON RESOURCESPLC via: https://www.investormeetcompany.com/egdon-resources-plc/register-investor

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Commenting on the Results Egdon’s Chairman, Philip Stephens said;

“Egdon has been transformed over the past year through growing revenues and with a significantly improved outlook and operating environment.  

The highlight has been the outstanding performance of the Wressle oil field which along with production from our existing fields and high oil and gas prices has resulted in a strong financial performance.

Despite the reintroduction of the moratorium on shale-gas by the Sunak led government, we will continue to make the case for the strategic importance that shale-gas could make to the UK’s economy and security of supply.

In the meantime, Egdon will focus on progressing its conventional oil and gas business and nascent energy transition projects to continue delivering long term value toits shareholders.”

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Download and view full announcement:

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