Preliminary Results for the year ended 31 July 2009
Sale of Licence Interests to Terrain Energy Limited
Egdon farms down selected UK onshore interests for a consideration of £687,500Egdon Resources plc (AIM:EDR) is pleased to announce that the Company has reached agreement to sell a package of interests in four onshore UK licences to Terrain Energy Limited ("Terrain"). The interests to be acquired are all located in the East Midlands and comprise of a 15% interest in PEDL005 (Remainder), and 25% interests in PEDL203, PEDL118 and PEDL206 respectively. Following completion Egdon will hold a 75% operated interest in all of these licences.The total value of the transaction to Egdon will be £687,500, with £450,000 payable in cash on completion and a further £237,500 payable on a staged basis on commencement of specific drilling activity on licences PEDL005(Remainder), PEDL118 and PEDL203. From completion, Terrain will also be paying its share of all expenses and receiving its share of all revenues from the licences.PEDL005 (Remainder) contains the producing Keddington oil field and the North Somercotes gas prospect. It is intended to drill a sidetrack of the Keddington 2y well later in 2009 and a planning application is currently being prepared for an exploration well at North Somercotes. PEDL203 contains the producing Kirklington oil field where a sidetrack well is planned to access additional oil reserves and boost daily production rates from the field. PEDL118 contains the Eakring-Dukes Wood oil field which is the subject of a staged rejuvenation project where the Dukes Wood-1 well will complete drilling later in 2009. PEDL206 is a 13th Round exploration licence containing the abandoned Kelham and Caunton oil fields and is under technical evaluation. A drill or drop decision will be made on this licence by 30 June 2011.The transaction is subject to regulatory approval by the Department of Energy and Climate Change and in the case of PEDL005(Remainder) approval by licence partners.Terrain Energy Limited is an exploration and production company set up to develop a portfolio of interests in the oil and gas producing basins of the onshore UK. The investors in Terrain are EIS funds and a Venture Capital Trust under the management or advice of Calculus Capital and the board of Terrain comprises individuals with considerable financial, operational and legal experience in the oil and gas sector.Commenting on the transaction, Mark Abbott, Managing Director of Egdon said;
"We are pleased to welcome Terrain Energy as a partner on these licences. As previously reported Egdon had been looking to farm-out interests in the Eakring-Dukes Wood and Kirklington projects where we held a 100% interest and in the North Somercotes gas prospect where we held a 90% interest. This transaction introduces a partner capable of joining Egdon in developing these projects further and provides Egdon with additional cash resources to undertake its near-term work programme. "
Commenting on the proposed investment, John Glencross, Managing Director of Calculus Capital said;
"We are delighted that Terrain’s first investment brings us into partnership with Egdon Resources. Egdon is an experienced and respected operator in the UK energy market and we look forward to working with them to further develop these fields."
Holding in Company
The Company was notified on 15 September 2009 that, as a result of a disposal of ordinary shares in Egdon Resources ("Ordinary Shares") on 14 September 2009, F&C Asset Management plc holds 3,772,558 Ordinary Shares (with an equivalent amount of voting rights) which represents approximately 5 per cent. of the issued Ordinary Share voting capital of the Company.
Holding in Company
Egdon has been informed by Heyco Energy Holdings, S.L. that it has transferred its entire shareholding in the Company, consisting of 6,861,434 ordinary shares, to Heyco International Inc. This transfer makes no change in ultimate beneficial ownership. Heyco Energy Holdings, S.L. has ceased to have any holding in the Company and Heyco International Inc. now holds 6,861,434 ordinary shares in the Company which is approximately 9.1% of the issued share capital of the Company.The Net Profit Interests on current and future production from the Avington Licences which were held by Heyco Energy Holdings, S.L. have also been assigned to Heyco International Inc.
Planning Permission Granted for Kirkleatham Gas Field Development
Egdon Resources plc (AIM:EDR), the UK-based exploration and production company focused on the hydrocarbon-producing basins of onshore UK and Europe, is pleased to report that it has received planning approval for the Kirkleatham gas field development in PEDL 068 in North Yorkshire where Egdon holds a 20% interest and is the Operator.On 13 August 2009, Redcar and Cleveland Borough Council granted planning consent for production from the existing Kirkleatham-4 well site, the construction of an underground pipeline to the Wilton site and for the drilling, testing and production for up to two additional wells at the site.Following a detailed review of the most likely schedule for regulatory consents, procurement and construction of the project, the joint venture partners have agreed to move the target completion of the project from late winter 2009/10 to autumn 2010. This will allow for construction during summer 2010 and ensure commissioning of the facilities will occur prior to the start of the 2010 winter gas season in October. This will ensure that maximum revenues are realised from the project whilst enabling a more efficient use of cash resources during the procurement and construction phase.Commenting on the project, Mark Abbott, Managing Director of Egdon, said:
“The award of planning consent for Kirkleatham is a key milestone and we are pleased the project had strong local support. We now have a clear schedule to ensure gas sales for the start of the winter 2010 gas market where it is anticipated that revenues from the project will be maximised. Work has already started on putting in place all the agreements, contracts and regulatory approvals to achieve this.”
Production Commences from Kirklington oil field
Egdon Resources plc (AIM:EDR), the UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK and Europe, is pleased to announce the commencement of production from its Kirklington oil field in PEDL203 located in Nottinghamshire.Following a period of commissioning and testing, the Kirklington-2 well was returned to continuous pumped production on 28 July 2009. As at 7 August 2009 the well had produced a total of 325 barrels of oil at an average daily rate of 32 bopd. Associated water production over the period was 640 barrels with an average water cut of 66%. This is in line with management’s expectations. The Kirklington-2 well has two oil producing intervals; the Sub-Alton Crawshaw and the Chatsworth Grit. The well is currently completed for production from the Chatsworth Grit.It is intended to continue producing the existing well until later in 2009 when a sidetrack will be drilled to an up-dip area of the Kirklington field to access additional oil reserves from both producing intervals. Planning approval is already in place for this operation.The Kirklington oil field was originally discovered by BP in 1986. Production from the Sub-Alton Crawshaw reservoir occurred between 1991 and 1998 and from the Chatsworth Grit reservoir from 2003 to 2004. Egdon acquired the current well-site from Star Energy in 2008.Commenting on the commencement of production, Mark Abbott, Managing Director of Egdon, said:
“The commencement of production from the Kirklington-2 well is the first stage in the re-juvenation of the Kirklington oil field. Having gained all authorisations and completed the upgrading of the facilities at the site we look forward to the next phase of development with the drilling of a sidetrack well to access additional reserves and increase daily oil rates and cash flow from the field. In the meantime we welcome the incremental production and revenues.“
Holding in Company
The Company was notified on 6 March 2009 that, as a result of a disposal of ordinary shares in Egdon Resources ("Ordinary Shares") on 5 March 2009, Brewin Dolphin Limited holds 3,430,428 Ordinary Shares (with an equivalent amount of voting rights) which represents approximately 4.99 per cent. of the issued Ordinary Share voting capital of the Company.These shares are held indirectly as follows:Name of ShareholderNumber of ordinary sharesPercentage holdingBrewin Nominees Limited232,1000.338Giltspur Nominees Limited3,118,3284.65Brewin Dolphin Nominees a/c Charity10,0000.01
Interim Results for the six months to 31 January 2009
Award of New Exploration Permit, Onshore France
Egdon Resources plc (AIM:EDR), the UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK and Europe, is pleased to announce the award of a new French exploration permit. The “Permis de Gex” (Gex Permit) was ratified on 28 May 2009 and published in the Official Journal on 11 June 2009.Egdon will operate the Gex Permit with a 40% interest through its wholly owned subsidiary Egdon Resources (New Ventures) Ltd. The other partners in the joint venture group are Eagle Energy Limited (40%) and Nautical Petroleum plc (20%). The Gex Permit covers an area of 932 square kilometres and has a five year initial term which commenced on 11 June 2009.The Gex Permit is located in the Jura/Molasse Basin of Eastern France adjacent to the Swiss border and the city of Geneva.The main exploration targets comprise oil in shallow Oligocene sandstones and gas in deeper Triassic reservoirs. The Triassic gas prospects have been identified based on a reinterpretation of the regional structure style, which indicates the presence of large basement involved anticlines with strong topographic expression. These structures are each mapped as having significant resource potential of over 1 trillion cubic feet of gas in place. The focus of exploration for the shallow Oligocene play are the surface anticlines developed within the permit area. The presence of oil seeps and oil in shallow boreholes demonstrates the presence of a working petroleum system for this play.The work programme will be phased, with the initial two years comprising geological and geophysical studies and gravity data acquisition followed by a second contingent phase of three years which would include the acquisition of new seismic data and the drilling of a well. The total financial commitment for the joint venture group over both phases will be €1.16 million.Commenting on the permit award, Mark Abbott, Managing Director of Egdon, said:
“The award of the Gex Permit represents further progress with the strategy we embarked on 18 months ago of growing Egdon’s French exploration position to further strengthen our medium-term exploration focus in a country with significant exploration potential, political stability and excellent fiscal terms. We are now able to progress the detailed evaluation of this high potential area which contains a mix of oil and gas prospects in a region which has been overlooked for a number of years. Of particular interest are the presence of large untested gas prospects in an area close to infrastructure able to feed into the European gas market “
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