Egdon Resources plc (AIM:EDR) is pleased to announce an agreement with Union Jack Oil plc ( “Union Jack”) to align our equity interests in PEDL241, and to jointly pursue a farmout for the drilling of the North Kelsey-1 exploration well.
The North Kelsey Prospect is a drill ready conventional oil prospect along trend from and analogous to the Wressle oil development – which lies some 15 km to the northwest – and has been mapped from 3-Dimensional seismic data to have potential for oil in up to four stacked conventional Carboniferous reservoir targets. Egdon estimates that the Prospective Resources range from 4.66 million barrels up to 8.47 million barrels, with a Mean Resource volume of 6.47 million barrels.
In September we announced an extension of the existing planning consent for drilling North Kelsey-1 to 31 December 2021. We have also received the requisite permits from the Environment Agency.
Under the terms of the agreement Union Jack will acquire a further 30% interest in the license for a cash consideration of £100,000 with the previous farm-in obligations terminating. Egdon will retain operatorship and a 50% interest in the licence. The transaction is subject to consent from the Oil and Gas Authority.
Upon completion of the acquisition the interests held in PEDL241 will be as follows:
|Company||Previous Interest||New Interest|
|Egdon Resources U.K. Limited||80% (Operator)||50% (Operator)|
|Union Jack Oil plc||20%||50%|
Commenting on the agreement, Mark Abbott, Managing Director of Egdon Resources plc, said:
“We are pleased to have reached agreement with Union Jack to fully align our interests and objectives in PEDL241 prior to a planned joint farmout of the drill ready North Kelsey-1 exploration well. All consents are in place to drill at North Kelsey, a Wressle analogue, providing a further potentially material value catalyst for Egdon during 2021.”