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 Limited||22.6042%|
|Aurora Exploration Limited||16.1458%|
|Corfe Energy Limited||12.5000%|
|Union Jack plc||10.0000%|
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 Limited||26.25%|
|Aurora Exploration Limited||18.75%|
|Union Jack plc||10.00%|
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.”