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Biscathorpe Assessment Demonstrates Significant Commercial Upside
Egdon Resources plc (AIM: EDR, "Egdon") is pleased to provide an update on the Biscathorpe Project in Lincolnshire Licence PEDL253 where the Company holds a 44.75% operated economic interest.
Highlights
· Economic modelling indicates a financially robust project even in the current oil price environment
· The principal Westphalian target has an estimated un-risked gross NPV(10) of £55.6 million
· Break-even full-cycle economics estimated to be (NPV(10)) US$18.07 per barrel of oil
· A 57 metre oil bearing section in the Dinantian Carbonate of Biscathrope-2 represents a secondary target with potentially significant commercial upside
· Future identified drill targets are accessible via a side-track of the suspended Biscathorpe-2 well.
Biscathorpe is located within the proven hydrocarbon fairway of the Humber Basin, on-trend with the Saltfleetby gasfield and Keddington oilfield (Egdon 45%) which produces oil from a Carboniferous Westphalian aged reservoir, the principal target at Biscathorpe.
The PEDL253 Joint Venture partnership has now completed extensive and detailed studies of the Biscathorpe project, including the reprocessing and remapping of 264 square kilometres of 3D seismic. This work has been integrated with the results of the Biscathorpe-2 well, resulting in a significantly improved understanding of the prospectivity in the Biscathorpe project area. The results of this substantial piece of work have concluded that a possible material and commercially viable hydrocarbon resource remains to be tested.
Accessible target areas have been identified, where evidence for a thickened Westphalian sandstone reservoir interval is evident on the reprocessed 3-D seismic. These areas can be targeted by a side-track of the existing Biscathorpe-2 well which was suspended following drilling operations in 2019. The side-track will also target the oil column logged in the underlying Dinantian Carbonate in Biscathorpe-2, as detailed below.
The gross Mean Prospective Resources associated with the Westphalian target area are estimated by Egdon to be 3.95 million barrels of oil (mmbbls), with an upside case of 6.69 mmbbls. Preliminary economic modelling demonstrates that the Westphalian target is economically robust in the current oil price environment with break-even full cycle economics estimated at US$18.07 per barrel and an NPV(10) valuation of £55.60 million.
The Westphalian objective was absent at the Biscathorpe-2 well location, however, a total of 57 metres of oil bearing, Dinantian Carbonate has been confirmed by petrophysical analysis. Hydrocarbon shows with background gas and sample fluorescence were recorded across the entire section from Top Dinantian Carbonate to the Total Depth ("TD") of the well (an interval of over 150 metres).
A geochemical analysis of the gas data and hydrocarbons extracted from drill cuttings was o