Directors Holdings in Company
Egdon Resources plc (the "Company") was informed today that as a result of Mr Walter Roberts's younger daughter achieving her majority, her shareholding is no longer to be counted as part of Mr Roberts's beneficial shareholding. Accordingly, although these shares have not been sold, Mr Roberts's beneficial shareholding is reduced by 200,000 ordinary shares to 1,091,750 ordinary shares, representing 0.83% of the issued and voting share capital of the Company.
Production Update
Egdon Resources plc (AIM:EDR) provides an update on production operations ahead of its interim results which are due for release in late April.Production for the six months to 31 January 2012 was 29,624 barrels of oil equivalent ("boe"), an increase of 67% over the same period last year (17,671 boe). This equates to 161 boe per day ("boepd") for the period (H1 2011- 96 boepd). Revenues from oil and gas sales during the period were £1.54 million, a 71 % increase on 2011 (£0.9 million).Whilst showing significant improvement on the same period last year, production is below our expectations for the period. This has been as a result of the previously reported continuing issues with production at both the Ceres and Kirkleatham gas fields.Ceres has continued to suffer from issues with the production infrastructure and has contributed only minor amounts of production during the period. The field is currently shut-in. The main issue relates to the reliability and performance of the methanol injection system. The operator has been actively working on this issue and it is hoped that the problems can be resolved in the near future. When on production, the Ceres well performs as expected with pre-back-out rates of 20 million cubic feet of gas per day ("mmcfg/d") and post back-out of 1.2 mmscfg/d net to Egdon (c. 200 boepd). Notwithstanding the difficulties with Ceres we do not believe that the long term value is affected.We reported at the time of the 2011 Annual Results that increased water production had been observed at the Kirkleatham gas field (PEDL068 - Egdon 40%) and that in November the well was shut-in awaiting a work-over. A work-over in early December was successful in clearing water from the tubing and production was re-established during December and January. However, overall gas flow rates had to be reduced to balance water production. In February following an unplanned shut-down of the GT2 gas turbine we were again unable to restart flow due to fluid loading in the tubing. An initial nitrogen displacement was unsuccessful and a further work-over last week failed to restore flow. Consequently the well will remain shut-in whilst the joint venture partners consider options aimed at resolving the water production issue and returning the well to production. These options include running production logs to determine the location of the water inflow, recompletion to isolate part of the perforated zone, installation of artificial lift and, ultimately, possibly drilling a sidetrack from the existing well to an up-dip area of the field.As a result of the problems at Kirkleatham we intend to make a precautionary impairment of the Kirkleatham gas field asset of £1.0 million at our interim reporting.The Keddington oil field in Lincolnshire Licence PEDL005(Remainder) (Egdon 75%) suffered from a reduction in production in December due to wax build-up in the production tubing. Hot washes were performed in January on both producing wells and the down-hole pumps were replaced. It is anticipated that production will stabilize at around 100 -125 bopd for the coming period. We have made further progress in developing the gas to electricity project for Keddington and are currently awaiting final detailed costs and timings from the local distribution network for the building of a 1.4 MW grid connection.Environmental consents have recently been received for the Dukes Wood oil field in Nottinghamshire licence PEDL118 (Egdon 50%) and we now expect to commence production during April from the Dukes Wood-1 and Kirklington-3Z wells at initial rates of around 40 barrels of oil per day gross.Until the issues associated with Ceres and Kirkleatham are resolved we anticipate a reduction in overall production and cash flow for the coming period. A prudent estimate of production for the next period is 125-150 boepd from Keddington, Avington and Dukes Wood/Kirklington. Once Ceres resumes production in a sustained manner this will increase to 300-350 boepd and should we be able to restore production from Kirkleatham we would anticipate being back at around 400 boepd.Commenting on production performance during the period Mark Abbott Managing Director of Egdon said;
"Our production volumes during the period, whilst showing significant improvement on the same period last year, are below our expectations. Given the problems being experienced at the moment we expect reduced production and cash flow over the coming period. We anticipate that the current issues with Ceres will be resolved in a timely manner and are actively working on the issues at Kirkleatham.We remain committed to our planned drilling programme in the UK and are making good progress with site agreements and submission of planning applications across these projects."
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 Interim Results for the six months ended 31 January 2012 will be announced on Monday 23 April 2012.An analyst meeting will be held at 9.30am on Monday 23 April 2012 at Buchanan, 107 Cheapside, London, EC2V 6DN.
Interim Results for Six Months Ended 31 January 2012
Planning Granted for Westerdale-2 Well
Egdon Resources plc (AIM:EDR) is pleased to announce that, at today’s meeting of the Planning Committee of the North York Moors National Park Authority, permission was granted for an exploratory borehole near the village of Westerdale in onshore Petroleum Exploration and Production Licence PEDL068, where Egdon is operator with a 40% interest.The Westerdale-2 well is planned to evaluate the Ralph Cross/Westerdale gas discovery in an area up-dip of the Ralph Cross-1 well, drilled in 1966, which flowed gas from fractured limestone of the Permian age Brotherton Formation at a depth of 1040 metres below surface. Company evaluations have indicated the potential for between 5 and 38 billion cubic feet (“Bcf”) of gas in place, with a most likely case of around 18 Bcf.The Company had previously drilled a well in the Westerdale area in 2006. This well did not find commercial gas reserves and the site was subsequently restored to farmland.The interest holders in PEDL068 are as follows:Egdon Resources U.K. Limited (operator)40.00%Sterling Resources (UK) Limited47.00%Yorkshire Exploration Limited8.00%Montrose Industries Limited5.00%Commenting on the decision Mark Abbott, Managing Director of Egdon said:
“We are delighted that the National Park Authority has approved our application for the Westerdale-2 well. The final timing of the drilling will be dependent upon the conditions of planning, rig and contractor availability and final joint venture approval and is likely to be during 2013. We recognise the unique qualities of the North York Moors and in accordance with Egdon’s Health, Safety and Environmental procedures will be doing everything possible to minimise the impact of our activities on the area.”
Completion of the Acquisition of Dorset Exploration Limited
Further to the announcement made on 21 June 2012, Egdon Resources plc (AIM:EDR) is pleased to announce that it has completed the acquisition of the entire issued share capital of Dorset Exploration Limited (“DEL”). DEL is a private company which holds 10% interests in Production Licence PL090 and Petroleum Exploration and Production Licence PEDL237, both located in the county of Dorset. Egdon Resources U.K. Limited is operator for both these Licences with a 45% interest in each.As consideration for the Acquisition, Egdon has today issued 1,223,242 Ordinary Shares (“the Consideration Shares”) to the previous shareholders of DEL which include Mr. John Rix who was a non-executive Director of Egdon until his retirement from the Board in late 2011. The issued shares represent 0.93 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 3 August 2012. The total number of Egdon Ordinary Shares in issue is now 132,192,336. Therefore, the total number of voting rights in the Company is 132,192,336.Licence PL090 contains the Waddock Cross Oil Discovery, where Egdon intends to progress with a planning application for the development of the field, and a number of other prospects. In PEDL237 the licence group has identified and delineated a potentially commercial accumulation of oil which was encountered in the 1959 Langton Herring North-1 well but may not have been adequately tested, and has mapped a number of structural prospects and leads at the level of the Sherwood Sandstone, the primary reservoir at the Wytch Farm oilfield. The licence group plans to delineate these structures, which extend into PL090, by reprocessing existing vintage 2D seismic data and/or acquiring new seismic, most likely 3D, with a view to promoting at least one into a viable, drillable prospect.Egdon estimate that the transaction will add an estimated 11 mmbo of Best Estimate Prospective Resources to Egdon’s resource inventory.The interests in PL090 and PEDL237 are as follows:Egdon Resources U.K. Limited (operator)45.00%First Oil Expro Limited 26.25%Aurora Exploration (UK) Limited18.75%Dorset Exploration Limited10.00%Commenting on the acquisition Mark Abbott, Managing Director of Egdon said:
“We are pleased to have completed this acquisition which increases our interest in these existing prospective Egdon operated licences. The transaction adds 11 million barrels of prospective resources to our prospect inventory and increases our interest in the Waddock Cross oil discovery where we are now in the process of developing a planning application for development of the field.”
Holding in Company
Egdon Resources plc (the "Company") was informed today that as a result of his recent marriage the beneficial shareholding in the Company of Mr Ken Ratcliff, a Non-executive Director, has increased by 103,500 shares.Mr Ratcliff’s total beneficial shareholding in Egdon Resources plc is now 156,500 ordinary shares, representing 0.12% of the issued and voting share capital of the Company.
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