(Alliance News) - Egdon Resources PLC on Wednesday reported business-wide losses despite production during the year beating its guidance figures.
The UK-focused oil & gas exploration and production company said its pretax loss for its financial year ended July 31 has widened to GBP4.8 million from GBP1.7 million the year prior, after write-downs, pre-licence costs and impairments of GBP3.03 million.
Egdon Resources said its production during the year was 145 barrels of oil per day, which beat its guidance of 130 to 140 barrels of oil per day. However, this was down from 182 barrels of oil per day in the previous year.
The company's gross oil and gas revenue during the period decreased by 56% to GBP960,000 from GBP2.2 million in 2019 and its net assets as at July 31 were GBP26.7 million, which was down from GBP31.0 million the year prior.
Egdon Resources also said it has been advised by Royal Dutch Shell PLC's Shell Oil UK Ltd, the operator of the offshore P1929 and P2304 licences, that the marine 3D seismic survey planned over the resolution and endeavour gas discoveries is anticipated to be acquired in February 2022, rather than during the first quarter of 2021 as previously stated.
Shell Oil UK said this is because it was not possible to finalise all of the required agreements in respect of the fishing vessels operating in the survey area within the time frame for it to take place this year.
Additionally, Egdon Resources has entered into an agreement with London-based investor Petrichor Partners LP and New Mexico, US-based oil and gas field services company Jalapeno Corp to raise gross proceeds of approximately GBP1.1 million through the issue of convertible loan notes. This will see Petrichor Partners owning 69.7 million shares and Jalapeno owning 3.5 million shares, representing a 46% stake in the company.
Petrichor Partners and Jalapeno can convert any outstanding convertible loan notes into ordinary shares in Egdon Resources at a price of 1.55 pence per share.
"The funds raised by the issue of the convertible loan notes will significantly strengthen the company's financial position and allow it, together with existing cash, to fund ongoing exploration and development projects such as the development of the Wressle oil field, planning for the Biscathorpe-2 side-track well and preparation for the acquisition of 3D seismic over the Resolution prospect and for additional working capital to maintain and develop the assets and opportunity base of the business," said Managing Director Mark Abbott.
Looking ahead, Egdon Resources said it will finalise development of the Wressle oil field for production start-up this month and will progress the planning application for a Biscathorpe-2 side-track well and a farm-out of North Kelsey-1 to be drilled in 2021.
Shares in Egdon Resources were down 3.0% at 1.60 pence in London on Wednesday.
By Zoe Wickens; zoewickens@alliancenews.com
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