PEDL180 and PEDL201
Egdon Resources plc (AIM:EDR) notes the announcement today by Europa oil and gas that the Wressle-1 well on licence PEDL 180 will spud in July 2014 at which point the Company will provide a further update. Egdon has a 25% interest in, and is operator of PEDL 180. Egdon also notes the resource assessment announced today by Union Jack Oil plc in respect of the northern parts of PEDL 201. Egdon has a 32.50% interest in, and is operator of PEDL 201.
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).
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
Results of Open Offer
As announced on 13 May 2014, the Company entered into a conditional agreement to acquire the onshore shale gas business and assets of Alkane Energy plc, which was, inter alia, conditional upon shareholder and DECC approval. At the time, the Company alsoannounced details of a conditional Placing to raise £6.4 million (before expenses) through the issue of 32,000,000 Ordinary Shares at an Issue Price of 20p per share and an Open Offer to raise up to a further £0.6m through the issue of up to 3,033,663 Ordinary Shares at an Issue Price of 20p per share. The Open Offer closed for acceptances at 11.00a.m. on 30 May 2014. The Company is pleased to announce that it has received valid acceptances from Qualifying Shareholders in respect of 16,261,629 Open Offer Shares, including applications for 14,565,911 Open Offer Shares under the Excess Application Facility. This represents approximately 536 per cent of the maximum Open Offer Shares available under the Open Offer and as such the Open Offer has been oversubscribed. Qualifying Shareholders who have validly applied for Open Offer Shares will receive their full Open Offer Entitlement and, following a pro-rata scaling back, approximately 9.185 per cent of any Open Offer Shares they applied for under the Excess Application Facility. The Company has therefore raised the maximum gross proceeds of £606,709 (before expenses) through the Open Offer.Both the Placing and Open Offer remain conditional upon, amongst other things, the approval by Shareholders of the Resolutions at the General Meeting of the Company to be held at 11a.m. on 5 June 2014, and the Placing Agreement becoming unconditional in all respects.It is expected that Admission will become effective and dealings in the Open Offer Shares will commence on or around 6 June 2014.Capitalised terms used in this announcement are as defined in the shareholder circular.A further announcement will be made in due course.
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.
Result of Extraordinary General Meeting
The Directors of Egdon Resources plc are pleased to announce that at the Extraordinary General Meeting held at the offices of Norton Rose Fulbright LLP on 5 June 2014, all resolutions put before shareholders at the meeting were duly passed.Details of voting at Egdon EGM of 5 June 2014
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."
Update on transfer of onshore shale gas business
Further to the announcement of 13 May 2014, Egdon wishes to notify that it is still awaiting consent from DECC for the transfer of licences from Alkane and now expects this consent to be obtained by 12 June 2014. As a consequence, admission of the new ordinary shares issued pursuant to the transaction with Alkane, the Placing and Open Offer, is now expected to become effective on or around 12 June 2014 rather than 6 June 2014 as originally notified.