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I'm verypleased to see that Egdon have done a deal on their Resolution prospect. Shell must be an ideal partner as Shell have been picking up Zechstein prospects elsewhere in the Southern North Sea, so presumably they know what they're doing. It's been a long time coming, though, and it's not exactly a fabulous deal when there won't be a Shell contribution towards Egdon's 30% share of a well. Looking at some of the deals recently done elsewhere in the North Sea, I think it's probably about par for the course. I don't how long the 3D seismic acquisition and processing will take, but I'd suggest that a well is still at least two years away, and maybe a bit later than that since it's so near shore.

I'm very pleased to see a farm-out deal has been done, but it's not exactly fabulous when there won't be any Shell contribution towards Egdon's 30% share of a well. Looking at other deals being done elsewhere in the North Sea these days, I think it's about par for the course. I'm not sure how long the 3D seismic acquisition and processing will take, but I'd suggest that a well is still at least two years away, and maybe a bit later than that since it's so near shore.

There's just been an RNS that Shell has farmed in.

I hope I'm worrying unnecessarily here, but I looked recently at all the Wressle partners' most recent accounts. It seems to me that all except UJO (that's Egdon, Europa & Humber ) are getting a bit too close for comfort to "running on empty". We and Europa could presumably have a placing to fund our % of the development costs - which I assume might be reasonably well supported on the back of Wressle and Resolution news - Humber may struggle to fund their share. I suppose we'll get a large percentage of the planning appeal costs back from North Lincs Council before too long. but that probably won't go very far between us. I wonder if it will be possible for partners to pick up their pro rata share of Humber's 12.5%. For us this would be about 4.4% . What do others think?

I had a look at the most recent accounts of the four Wressle partners, and it occurs to me that all of them except UJO (Egdon, Europa and Humber) are getting pretty close to "running on empty". While Egdon and Europa could have a placing which would presumably be reasonably well supported, Humber may struggle to fund their share. So it would be possible for UJO to pick up another approx. 3.9% as their proportion of Humber's 12.5%.

Thanks Steptoes and Everyone for your earlier comments on expected Wressle costs. We must obviously differentiate between historic exploration costs / forthcoming development costs (both of which will presumably be capitalised and should therefore reduce or eliminate any early corporation tax bills) and the expected operating / lifting costs. It was these operating / lifting costs I was most interested in. After asking around I now reckon that the range is $10 to $15 per barrel for onshore UK fields, so for my own calculations I'll probably use $12 (about 20% of the gross sales proceeds) as an approximation for the lifting costs. What about any other taxes - is royalty still payable in the UK?

What's Wressle really worth to UJO? In gross terms, 500 barrels of oil production per day x (say) $60 per barrel x UJO's 27.5% share in the field comes to $8,250 per day, or about $3 million per year. That's gross turnover, not profit, of course. Does anyone know what amounts must be subtracted from the $60 to allow for production and transport costs and any royalty payable to the government? IMHO it can't be much less than about 20% of the gross proceeds, but I'm only guessing here. Does anyone have any fbetterideas about costs please?

I reckon Humber will cause problems at WN, as well as at Biscathorpe, if they haven't already done so. There could be a difficult situation if Humber try to raise money by selling part of their 16.665% WN interest because - I think - they haven't earned any of it until the EWT has been completed. Who would want to buy it until they have seen how the oil will flow, except maybe us or UJO? At this time of year Rathlin will probably be issuing their annual WN budget (if they haven't done this already) and getting their licence partners' approvals for the upcoming drilling programme, etc. If Humber don't have the cash they could be voted in to the work, depending on what the operating agreement says. If this is the case, Rathlin / RBD and UJO may simply proceed by paying Humber's share of the cost between them. So Humber could be shut out of WN if they default. And maybe that wouldn't be the worst thing that could happen. Well, we'll see!

Hi Rudey, I suspect you are right about position building. However, Egdon's 27 November RNS talked about the further work required at Resolution for a licence extension. It said: "By 31 January 2020, demonstrate to the OGA's satisfaction that a farm-in agreement has been fully executed which provides for funding of the licence work programme". This made me think a further RNS was now imminent, or might not happen at all. My money, as a very modest Egdon holder, is on the former. Sorry to those who feel this is off topic / on the wrong BB, but it may be relevant to UJO since our SP is pretty stagnant right now, and Egdon seem to be motoring.

Hi there passiton. I saw your post yesterday before it disappeared, thanks. It beats me why some people on this BB remove interesting stuff they don't agree with, but are happy to add to the large volume of irrelevant dross. Like me, some might say! Mind you, I'd never remove another person's contributions since they can easily be skipped over.

I posted this on Egdon's LSE BB today. Does anyone on this BB agree with me?
"I agree that Egdon's recent SP improvement has more to do with the Resolution prospect than it does with Wressle. If a favourable Wressle decision had been leaked and was believed to be imminent, UJO would be on the move too, but it isn't. The reason the potential Resolution partner isn't likely to do the dirty on Egdon at this stage is because they will have probably signed a "non-compete" confidentiality agreement. Their name would be mud in the industry if they went back on their word by backing out at the last minute and applying for it later on without Egdon. I think it's likely to be Shell, but that's only a guess. Shell have been sniffing around other Zechstein prospects in the Southern North Sea, so it could be them and they fit the "super-major" description."
I reckon we will know about Resolution very soon, but I wish it was news about Wressle

Hi gogetter. I agree that Egdon's recent SP improvement has more to do with the Resolution prospect than it does with Wressle. If a favourable Wressle decision had been leaked and was believed to be imminent, UJO would be on the move too, but it isn't. The most likely reason the potential partner isn't likely to do the dirty on Egdon at this stage is because they will have probably signed a "non-compete" confidentiality agreement with Egdon. Their name would be mud in the industry if they went back on their word by backing out at the last minute and applying for it later on without Egdon. I think it's likely to be Shell, but that's only a guess. Shell have been sniffing around other Zechstein prospects in the Southern North Sea, so it could be them and they fit the "super-major" description. I reckon we will know about Resolution very soon.

Hi there passiton
I don't think that Mr Ware, the planning inspector, will be travelling to Sc**thorpe to tell NLCC what his decision is. So why would Egdon want to go north when they (or their legal team) will be advised by the inspector at the same time as NLCC is told. All the best. GP

While we wait for Wressle and WN, has anyone heard / seen anything about Biscathorpe lately (other than on this board, which seems to have been mainly about the Humber default issue).
We were told in a 15 July RNS from UJO and Egdon that further work was about to happen. Since then , nothing has been said as far as I can tell. The work was apparently going to include the re-processing and re-interpretation of up to85 square km of the existing 3D seismic data. I've no idea how long this should take, but I would have thought 6 months would do it if they actually started work back in July 2019. Any thoughts welcome.

Has anyone commented yet on Calif******Joe's 11 Jan blog? You may not agree with every or anything he says about (some of_ those posting on this BB. Sadly, I think he understands their motives all too well. I've been wondering whether a massive UJO share consolidation, perhaps 1 for 50 or 1 for 100, might not be a bad idea. I'm generally against share consolidations as they are usually followed by a reduction in shareholder value - at least in the short term. But for LTH's at UJO? I wonder. A big consolidation might reduce day trader activity if the UJO share price was 16p rather than 0.16p. Any thoughts, or is this merely a forlorn hope?

Hi there Rudey
Was your e-mail yesterday from UJO or from Egdon? I assume that Egdon, as the operator / appellant, will get to hear the inspector's decision slightly ahead of UJO's finding out via Egdon what it was. But what's an hour or two more when we've been waiting so long!

Hello again AJamesW: I'm not sure which RNS you're referring to but, based on a conversation I had a while ago with one of the UJO directors, the entire 65 metre Kirkham Abbey pay in WN-2 is made up of a 20m gas zone overlying a 45m oil / condensate zone. There is no other upper and lower zone, of gas or anything else, unless you believe the gas in WN-1 is in a different zone. I don't think it can be, as the pay is also in the Kirkham Abbey formation in WN-1.

Hi there AJamesW. I don't think Rathlin can have perforated both the "upper and the lower gas section, in what they thought was above the Gas/Oil contact zone". I'm pretty sure there is only one (upper) gas zone and one (lower) oil zone in WN-2. I think they must have perfed just the oil zone. Also, why would they risk perforating the gas cap as part of an oil test, so as to produce gas along with the oil, and at the risk of removing a lot of the pressure support, in what Rathlin have said to the locals is a low pressure reservoir?

I believe there are only about three onshore drilling rigs in the UK. Do we really need a full blown exploration rig to do the EWT? I assume there are smaller work-over rigs available which could be mobilised to WN fairly quickly to WN when we get the go ahead. Is there anyone with a drilling background out there who can say if this is the case?

I think that's about right Rudey. I should have said Rathlin / Reabold: 80% and UJO: 20%.
I know that Reabold are a majority Rathlin shareholder but they aren't on the actual WN licence. Do you know the EXACT percentage of Rathlin's shares that RBD currently hold? I think it's about 58.5%, but I'm not certain.