Latest news

Egdon Resources plc (AIM:EDR) is pleased to announce the farm-out of an interest in Petroleum Exploration and Development Licence 180 (“PEDL180”), located in Lincolnshire, to Union Jack Oil plc (“Union Jack”). The farm-out is a further example of delivering on the Company’s strategy of farming out assets to manage risk and accelerate activity.Under the terms of the agreement, Union Jack will pay 16.66% of the cost of the planned Wressle-1 exploration well to earn an 8.33% interest in PEDL180. If the well is successful and proves the existence of an economically developable hydrocarbon accumulation, Union Jack will also earn an 8.33% interest in the part of the field which is determined to extend into the adjoining Licence PEDL182. As a result of this farm-out, Egdon’s exposure to the Wressle-1 well cost is reduced to 16.67%.On completion, the licence interests in PEDL180 will be as follows:Egdon Resources U.K. Limited25.00% (Operator)Celtique Energie Petroleum Limited33.33%Europa Oil & Gas Limited33.34%Union Jack Oil plc8.33%The transfer of interests is subject to approval by the Department of Energy and Climate Change.PEDL180 was awarded in 2008 and is located on the western margin of the Humber Basin. The Wressle Prospect was originally identified and mapped using vintage 2D seismic data but has now been defined on proprietary 3D seismic data, which was acquired by Egdon in February 2012. The Prospect is located on trend with the producing Crosby Warren oil field and the Broughton-B1 oil discovery, both to the immediate northwest, and the Brigg-1 oil discovery to the immediate southeast. All contain oil in various different sandstone reservoirs within the Upper Carboniferous succession. The gross mean Prospective Resources at Wressle, as calculated by Egdon, are estimated to be 2.1 million barrels of oil.The planned well will be drilled as a deviated well to a total depth of about 2300 metres (ca. 1850 metres TVDSS) and a maximum offset of approximately 1250 metres. It has been designed to intersect all of the prospective sandstone reservoirs in a structurally favourable position near the crest of the Wressle structure. A surface location for the well site has been identified and a lease agreed with the landowner. A planning application was submitted in March 2013 and subject to receiving planning consent, it is intended that the Wressle-1 well will commence operations in the third quarter of 2013 as part of a programme of drilling, which will include the Burton on the Wolds-1 exploration well in Licence PEDL201.Commenting on the farm-out Mark Abbott, Managing Director of Egdon said:

“We are pleased to welcome Union Jack into PEDL180 and the drilling of the Wressle Prospect. The prospect is well defined on new 3D seismic data and has the right “address”, being located between existing oil fields and discoveries. This farm-out is a further example of delivering on our strategy of managing both the technical and financial risks within our overall drilling portfolio. We now look forward to commencement of drilling operations in the East Midlands in the third quarter of 2013.”

Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement on terms for the sale of a 10% interest in Licences PL090 and PEDL237 located in Dorset, to Union Jack Oil plc (“Union Jack”).Under the terms of a Sale and Purchase Agreement (the “Agreement”) Egdon’s 100% subsidiary Dorset Exploration Limited has granted Union Jack an option (exercisable up to 31 July 2013) to acquire the licence interests for a cash consideration of £560,000, payable on completion. A £20,000 non-refundable deposit has been paid under the terms of the Agreement. This deposit will form part of the consideration should the option be exercised.The transfer of interests will be subject to approval by the Department of Energy and Climate Change.Assuming the option is exercised and the recently announced transactions with Corfe Energy Limited have been completed, the resultant Licence Interests in PL090 (excluding Waddock Cross) and PEDL237 will be;Egdon Resources U.K. Limited (Operator)38.7500%First Oil Expro Limited22.6042%Aurora Exploration Limited16.1458%Corfe Energy Limited12.5000%Union Jack plc10.0000%The Licence Interests at completion, in the Waddock Cross field development area of PL090 will be;Egdon Resources U.K. Limited (Operator)45.00%First Oil Expro Limited26.25%Aurora Exploration Limited18.75%Union Jack plc10.00%PL090 and PEDL237 are located in the Wessex Basin, a geological basin with existing oil production at Wytch Farm, Wareham and Kimmeridge.Planning permission for the Waddock Cross field development in PL090 is expected soon and Egdon anticipates that production will commence during the third quarter of 2013 at gross rates of around 30-40 barrels of oil per day. Waddock Cross is mapped as having mean oil in place of over 30 million barrels. The plan for the first phase of the development is to drill two further horizontal producer wells by 2015. Egdon estimate gross Proven and Probable Reserves for the field for this initial phase at around 300,000 barrels of oil.Elsewhere in the licences Egdon has identified a number of leads and prospects at various reservoir levels including the Sherwood Sandstone, the primary reservoir at the Wytch Farm oilfield. Two prospective structures at Casterbridge and Broadmayne are identified where Egdon evaluate combined gross Best Estimate Prospective Resources of around 50 million barrels of oil. A 3D seismic programme is planned to evaluate these structures later in 2013 and should enable the licence group to identify the best location for a future exploration well, currently anticipated for 2014.Commenting on the transaction Mark Abbott, Managing Director of Egdon said:

“This transaction would realise cash for the wider business whilst maintaining a material interest for Egdon in the Waddock Cross field development and the high potential Wessex Basin exploration prospects. We can look forward to first oil from the Waddock Cross oil field development in the third quarter of 2013 and the commencement of 3D seismic acquisition later in 2013 which should enable us to identify the best location for a possible exploration well on the high impact prospects of Casterbridge and Broadmayne.After a period of limited activity in these licences the planned increase in activity means that our Wessex Basin assets now have the potential significantly to drive near-term shareholder value.”

Egdon Resources plc (AIM:EDR) is pleased to announce that it has agreed terms with Blackland Park Exploration Limited (“Blackland Park”) and Stelinmatvic Industries Limited (“Stelinmatvic”) for a farm-in to UK Onshore Petroleum Exploration and Development Licence PEDL209 (“the Licence”) located in Lincolnshire. Under the terms of the Farm-in Agreement Egdon will earn a 60% interest in the Licence in return for paying 100% of the cost of the planned Laughton-1 exploration well to the point of completion of the well for testing or, in the case that the well is a dry hole, abandonment and restoration of the site. Egdon will also assume operatorship of PEDL209.The Licence Interests in PEDL209 at completion will be;Egdon Resources U.K. Limited (Operator)60%Blackland Park Exploration Limited28%Stelinmatvic Industries Limited12%The transfer of interests and operatorship is subject to approval by the Department of Energy and Climate Change.PEDL209 covers a total area of 64 square kilometres and adjoins Egdon’s existing Licences PEDL139 and PEDL140 in the eastern part of the Gainsborough Trough geological basin of the East Midlands Petroleum Province.The Laughton Prospect is a structural trap defined on 2D seismic data. The prospect has multiple conventional Carboniferous sandstone reservoir targets with the primary objective being the Silkstone Rock, an approximately 15 metres thick sandstone interval which is productive in the Corringham oil field 5 kilometres to the South East. Egdon currently estimate gross Mean Prospective Resources of around 1 million barrels of oil for the Silkstone Rock in the Laughton Prospect. A planning application for the exploration well is currently under consideration by Lincolnshire County Council. The estimated well cost is around £1.3 million and, subject to planning consent, Egdon expects to drill the well during the first half of 2014.A number of additional oil and gas prospects similar to the Laughton structure have also been identified within the Licence’s area.Egdon also recognises that there is potential for significant shale-gas resources to be present within parts of the Licence. The Company’s current evaluation indicates that the Pendleian Shale shale-gas play extends over about 45 square kilometres of PEDL209. Using similar parameters to those defined by RPS Energy in their independent evaluation of the prospective shale-gas resources in PEDL139 and PEDL140, Egdon estimates that the total in-place volume of gas within the Pendleian Shale interval in PEDL209 could alone amount to over 3 Trillion cubic feet. Further, as with PEDL139 and PEDL140, PEDL209 is interpreted as holding additional shale-gas potential in the thick Lower Carboniferous sequence which underlies the Pendleian Shale but which remains to be tested by drilling in the region. Neither of these sequences will be penetrated in the planned Laughton-1 well.Commenting on the transaction Mark Abbott, Managing Director of Egdon said:

“We are pleased to have concluded this farm-in in one of our core business areas. The initial focus will be the drilling of the Laughton-1 exploration well, which will target a conventional prospect with gross Best Estimate Prospective Resources in the primary reservoir target of around 1 million barrels of oil close to existing production.Importantly the farm-in also delivers on our stated strategy of providing Egdon with increased exposure to shale-gas potential in an area identified by Egdon as containing an extension of the “sweet spot” of the Pendleian Shale play identified in our adjoining Gainsborough Trough licences PEDL139 and PEDL140.Subject to planning, we expect to drill the Laughton-1 well as part of our planned 2014 drilling programme.”

Egdon Resources plc (AIM:EDR) is pleased to announce that it has been notified by North Lincolnshire Council that Planning Consent has been granted for the drilling of an exploratory borehole on the Wressle Prospect in UK Onshore Petroleum Exploration and Production Licence PEDL180, located to the east of Scunthorpe.The Wressle Prospect is defined on proprietary 3D seismic data, which was acquired by Egdon in February 2012. The Prospect is located on trend with the producing Crosby Warren oil field and the Broughton-B1 oil discovery, both to the immediate northwest, and the Brigg-1 oil discovery to the immediate southeast. These contain oil in multiple Upper Carboniferous sandstone reservoirs. The gross most likely Prospective Resources(Note 1) at Wressle, as calculated by Egdon, are estimated to be 2.1 million barrels of oil.The planned well will be drilled as a deviated well to a total depth of about 2300 metres (ca. 1850 metres TVDSS (Note 2)) with a maximum offset of approximately 1250 metres. It has been designed to intersect all of the prospective sandstone reservoirs in a structurally favourable position near the crest of the Wressle structure.The interests in the Wressle-1 well are:Egdon Resources U.K. Limited25.00% (Operator)Celtique Energie Petroleum Limited33.33%Europa Oil & Gas Limited33.34%Union Jack Oil plc8.33%Under the terms of a Farm-Out Agreement, as previously announced, Union Jack Oil plc will pay an additional 8.33% out of Egdon’s share of the cost of the well so reducing Egdon’s net share of the cost to 16.67%.Commenting on the approval Mark Abbott, Managing Director of Egdon said:

“We are pleased that North Lincolnshire Council has approved our application for the drilling of the Wressle-1 exploration well and we can now look forward to the commencement of drilling operations later in 2013.”

(Note 1) Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.(Note 2) TVDSS means True Vertical Depth Sub-Sea which is the vertical depth measured relative to a datum of mean sea level.

Egdon Resources plc (AIM:EDR) is pleased to announce that it has signed an Exploration Option and Farm-in Agreement (“The Agreement”) with Scottish Power Generation Limited (“SPG”) in respect of UK Onshore Production Licences PL161 (Block SE/60b) and PL162 (Blocks SE/70a and SE/80b) located in Lincolnshire.The Agreement defines an “Exploration Area” which excludes those parts of PL161 and PL162 which relate to the Hatfield Moor and Hatfield West gas storage facilities, both operated by SPG.Under the terms of The Agreement SPG has granted Egdon an Option Period of twelve months by the end of which Egdon is required to either advise SPG of its intention to commit to the drilling of an exploration well in the Exploration Area (the “Option Well”) or else terminate The Agreement.During the Option Period, Egdon will undertake, at its own cost and risk, a full evaluation of the hydrocarbon potential of the Exploration Area to include reprocessing all relevant existing 2D seismic data, evaluation of all available well data, and generation of a full review and report on the hydrocarbon prospectivity of the Exploration Area.In the event that Egdon commits to drill the Option Well, Egdon will meet the full cost of the drilling and evaluation of the well to the point of either abandonment or suspension in the case of a discovery. Egdon will earn a 50% working interest in the Exploration Area through the drilling of the Option Well and will become Operator of the Exploration Area.PL161 and PL162 are located in the East Midlands Petroleum Province, on the northern margin of the Gainsborough Trough geological basin. The licences contain the Hatfield Moor and Hatfield West gas fields which produced gas from sandstones of Carboniferous age from the 1980s. The two fields are now depleted and are operating as gas storage facilities. In addition, five exploration wells were drilled in the Exploration Area between 1973 and 1978. Egdon currently holds interests in licences to the south (PEDL139 and PEDL140) and south east (PEDL209) of the Exploration Area. The Company’s preliminary regional evaluation has indicated the potential for there to be both undiscovered conventional and unconventional oil and gas resources within the Exploration Area.Commenting on the agreement Mark Abbott, Managing Director of Egdon said:

“We are delighted to have reached agreement with SPG in relation to the option to farm-in to these two licences. The Agreement provides Egdon with an opportunity to develop our position within one of our core areas during a time when we are progressing drilling plans in the adjoining licences which should lead to a better understanding of the hydrocarbon potential of the Exploration Area.We look forward to working with SPG as we progress our detailed evaluation of the area over the coming year and we will update shareholders once we are in a position to do so.”

Egdon Resources plc (AIM:EDR) is pleased to announce that Dorset County Council has granted planning permission for the development of the Waddock Cross oil field in onshore Production Licence PL090, located around 10 kilometres to the east of the town of Dorchester.The detailed planning consent allows for the retention of the existing site for a period of ten years for oil production from the two existing wells, and the drilling of a sidetrack and two new boreholes for further appraisal of the field and production of oil.An Environmental Permit has also been granted for the site by the Environment Agency.Subject to satisfaction of the planning conditions and approval of the Field Development Plan by the Department of Energy and Climate Change, it is anticipated that production will commence during the third quarter of 2013 at initial gross rates of around 30-40 barrels of oil per day. Waddock Cross is mapped by Egdon as containing mean in-place volumes of over 30 million barrels of oil in the Lower Jurassic age Bridport Sandstone. The plan for the first phase of the development is to drill two further horizontal producer wells by 2015. Egdon estimate gross Proven and Probable Reserves for the field for this initial phase to be about 300,000 barrels of oil.The interests in the Waddock Cross oil field are currently:Egdon Resources U.K. Limited45.00% (Operator)First Oil Expro Limited26.25%Aurora Exploration Limited18.75%Dorset Exploration Limited10.00%Union Jack plc holds an option to purchase the 10% interest in PL090 (including Waddock Cross) and the neighbouring licence PEDL237 currently held by Dorset Exploration Limited (a wholly owned subsidiary of Egdon) for a cash consideration of £560,000. This option is exercisable until 31 July 2013.Commenting on the approval Mark Abbott, Managing Director of Egdon said:

“We are delighted by the award of planning consent, which is a key step in progressing to the first commercial production from our Dorset licences and a new source of revenue for Egdon. We look forward to advising shareholders of first oil from the field which is expected before the end of September.”

Egdon Resources plc (AIM:EDR) note the recent publication of a number of government initiatives and reports in relation to shale gas and the wider onshore UK oil and gas industry.Commenting on the implications of these for Egdon, Mark Abbott, Managing Director of Egdon said;

"The release by the Department of Energy and Climate Change of the British Geological Survey ("BGS") report (https://www.gov.uk/government/publications/bowland-shale-gas-study) on estimated gas in place in the Bowland-Hodder unit of Central England has confirmed the significant potential of this play. Of particular relevance to Egdon, the report includes estimates of gas in place for the lower Bowland-Hodder unit ("Lower Bowland") which, although carrying higher uncertainty due to the current limited number of well penetrations, is evaluated as having potential gas in place volumes of around four times those estimated for the upper Bowland-Hodder unit ("Upper Bowland").Egdon have long recognised that the Lower Bowland sequence in the Gainsborough Trough could be in excess of 1500 metres in thickness and the BGS report shows most of Egdons licences, PEDL139, PEDL140 and PEDL209, as being located within the area of gas mature Lower Bowland. This highlights the possibility of further significant gas in place in the licences in addition to that already evaluated by RPS Energy for the approximately 125 metre thick Upper Bowland sequence (see Note 1). Whilst it is premature to assign resources to the Lower Bowland in these licences the planned exploration well in PEDL139/140 will gather information from the Lower Bowland sequence to enable its potential to be more fully defined. The BGS report also highlights additional shale gas potential in certain parts of Egdons PEDL201 and PEDL130 licences. We are highly encouraged by the content of the report and continue to undertake our own detailed evaluation of the shale gas potential of these and other licences and of the potential for shale oil elsewhere in our existing portfolio with the expectation of upgrading our resource estimates in due course.As an active member, Egdon welcome and endorse the publication by the UK Onshore Operators Group ("UKOOG", http://www.ukoog.org.uk/) of a binding industry charter for members covering the minimum required standards of engagement with local communities alongside a community benefits scheme designed for the next phase of shale oil and shale gas exploration and production.The Company is encouraged by the Governments commitment to publish in July 2013 a package of measures designed to "kick-start" the shale gas industry in the UK. The publication by the Department for Communities and Local Government of planning guidance for onshore oil and gas (including shale gas) should provide a clear framework for how such developments should proceed through the planning system. We also look forward to the outcome of the consultation on a "pad allowance" in relation to taxation for shale gas which should provide clarity on the fiscal regime and we welcome the commitment of the Environment Agency to streamline and simplify environmental regulation of onshore oil and gas activities."

Note 1 - RPS Energy ("RPS") evaluated the potential shale gas resources in Egdons licences PEDL139 and PEDL140 (the "Licences") which are located in Lincolnshire and where the Company holds 13.5% interests.The Licences are located in the Gainsborough Trough geological basin and contain a 125 metre thick sequence of Carboniferous age Pendleian Shale at a depth of over 2000 metres. The Pendleian Shale is the approximate age equivalent of the upper Bowland-Hodder unit as defined in the recent BGS report. RPS estimated the mean net Egdon total gas in place ("GIIP") as 1.76 trillion cubic feet of gas ("tcf") within the Licences. A review of the surface and sub-surface access constraints in the area has resulted in an estimated mean net Egdon Accessible GIIP of 1.22 tcf. The net Egdon mean Prospective Resources are estimated as 0.19 tcf based on recovery rates in analogous US plays. Please use the following link for the full press release in relation to this assessment:PEDL139_and_140_Shale-Gas_Resources_Assessment

Egdon Resources plc (AIM:EDR) notes the announcement made today by Union Jack Oil plc (“Union Jack”) regarding the posting of its AIM Admission Document to shareholders.In today’s announcement Union Jack state with respect to various agreements with Egdon which were previously announced on 5 March and 14 May 2013:

• The Union Jack Board does not intend to exercise its option to acquire an interest in Wessex Basin Licences PL090 and PEDL237. This option will expire on 31st July 2013 under the terms of the Sales & Purchase Agreement with Dorset Exploration Limited (“Dorset”), the 100% owned subsidiary of Egdon. The £20,000 deposit paid by Union Jack under the terms of the Agreement will be retained by Dorset.
• The Union Jack Board does not intend to exercise options to acquire from Egdon an additional 5% interest in East Midlands Licence PEDL241 (North Kelsey) or a 10% interest in East Midlands Licence PEDL005R (North Somercotes). These options will expire on 31st July 2013 under the terms of the Letter of Intent Agreement between Egdon and Union Jack.
• Egdon and Union Jack have entered into new Agreements providing Union Jack with the option to withdraw from its obligations under Farm-out Agreements for East Midlands Licences PEDL241 (North Kelsey) and PEDL253 (Biscathorpe). If Union Jack elects to exercise the withdrawal option(s), it will pay a fee of £5,000 for each (£5,000 and £3,000 respectively net to Egdon) and its interest in the respective Licence(s) will be terminated.Commenting on Union Jack’s announcement, Mark Abbott, Managing Director of Egdon said:“It is obviously disappointing to Egdon that Union Jack is not in a position at this time to exercise the options with respect to either the purchase of interests in the Wessex Basin or certain farm-outs in the East Midlands. However, Egdon will now retain a 55% interest in the Waddock Cross oil field where planning consent has recently been received and we look forward to updating shareholders of commencement of production and revenues from the field in the next few months.”

Egdon Resources plc (AIM:EDR) is pleased to announce that Lincolnshire County Council has granted Planning Consent for the drilling of an exploratory borehole on the Laughton Prospect in UK Onshore Petroleum Exploration and Production Licence PEDL209, located between the towns of Gainsborough and Scunthorpe in the East Midlands Petroleum Province.The Laughton-1 well will target a structural trap defined on 2D seismic data. The prospect has multiple conventional Carboniferous sandstone reservoir targets with the primary objective being the Silkstone Rock, an approximately 15 metres thick sandstone interval which is productive in the Corringham oil field 5 kilometres to the South East. Egdon currently estimate gross Best Estimate Prospective Resources of around 1 million barrels of oil for the Silkstone Rock in the Laughton Prospect.Under the terms of a Farm-in Agreement Egdon will earn a 60% interest in the Licence in return for paying 100% of the cost of the Laughton-1 exploration well which is estimated at around £1.3 million. Egdon expects to drill the well during 2014 as part of a planned East Midlands exploration drilling programme which, subject to planning, could include wells on the North Kelsey and Biscathorpe prospects.The Licence Interests in PEDL209 at completion of the farm-in will be;Egdon Resources U.K. Limited (Operator)60%Blackland Park Exploration Limited28%Stelinmatvic Industries Limited12%Commenting on the approval Mark Abbott, Managing Director of Egdon said:

“We are pleased that Lincolnshire County Council has approved the application for the drilling of the Laughton-1 exploration well and we will now work to satisfy the various planning and permitting conditions to be in a position to drill this well during 2014.”