LONDON (Alliance News) - Egdon Resources PLC Friday said it swung to profit in the first half, as it unveiled a resource estimate upgrade for its northern England licences.
The exploration and production company, with a primary focus on the hydrocarbon-producing basins of the onshore UK, posted pretax profit of GBP834,000 for the six months ended January 31, compared with a GBP228,000 loss a year earlier. This was made after gains on asset transactions of GBP1.1 million and impairments on GBP3,0000 on relinquished licences.
Revenue, however, dipped to GBP1.4 million from GBP1.6 million, on production of 35,773 barrel of oil equivalent, compared with 37,698 in the corresponding period. This equates to a daily production of 194 barrels of oil equivalent per day, down from 205 barrels of oil equivalent per day, and against a reported full-year target of 200 barrels.
At the period-end the firm said it had GBP1.2 million of cash and cash equivalents, down from GBP2.1 million a year earlier and net current assets of GBP2.0 million compared with GBP1.9 million in 2013.
In a separate note, the firm said an independent review of the shale gas potential of some of its Northern England licences has been completed, which found that there is around 18 trillion cubic feet of gas (TCF) with a range of approximately 8 to 31 TCF and a mid-case of 15 TCF in seven of its Licences.
However, the firm warned that the estimates of undiscovered gas initially in place are subject to exploration risk, which may be "considerable."
"ERCE [who conducted the review] has not assessed this risk as no prospective resources have yet been attributed to these properties by Egdon, and further geoscientific data need to be acquired to be able to quantify these resources," the firm said.
Mining of the overlying coal measures has occurred in a number of the licences, which may affect site access and drilling operations, it added.
Looking ahead, Egdon said it expects its UK shale-gas assets to be an increasing near-term value driver for the business. It also plans to participate in the 14th UK Onshore Licensing Round expected this year and will continue to review new opportunities for growth.
The Department of Energy and Climate Change has the responsibility of issuing licences to companies wishing to explore for oil or gas, including shale gas.
The stock was trading at 22.33 pence Friday midday, down 1.9%.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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