EDR.L Regulatory News (EDR)

3 Sep 2007 07:00

Egdon Resources PLC03 September 2007 3rd September 2007 For Immediate Release EGDON RESOURCES PLC ("EGDON" or "The Company") Acquisition of onshore UK licences from Stag Energy Limited Egdon Resources Plc (EDR:AIM), the onshore UK focused energy company, is pleasedto announce that it has reached agreement with Stag Energy Limited ("STAG") toacquire its entire interest in UK Onshore Petroleum Exploration and DevelopmentLicences PEDL094, PEDL118, PEDL130 and PEDL132 all of which are located in theEast Midlands. The consideration for the acquisition is £100,000 in cash and £25,000 in EgdonOrdinary shares. In addition Egdon has granted a Gross Overidding Royalty of 5%of future production from the licences. Licence PEDL 118 (Egdon 100%) contains the Eakring-Dukes Wood abandoned oilfield which produced from a number of stacked shallow sandstone reservoirs ofCarboniferous age from 1940 until 1966. The field was discovered in 1939 andextensively drilled and produced during the second world war, where productionpeaked at 1600 barrels of oil per day in 1941. A water flood was initiated in1947 and total production at abandonment in 1966 was 6.5 million barrels of oil(mmbo) out of mapped 25.6 mmbo in place. However, extensive studies by BP duringthe 1980's indicated that the water flood resulted in some reservoirs beingprematurely "killed" and unswept. As such there is potential to rejuvenate thefield to take advantage of increased oil price, improved technology and therecognition of undrilled and undrained parts of the field. Planning approval is in place for the drilling of the Eakring North prospectwhich will test an undrained culmination at the north of the Eakring-Dukes Woodstructure. Options will be investigated for the restoration of production fromsome of the existing abandoned wells on the field. Reservoir modelling will beundertaken to determine the potential to access undrained areas of the field andfor enhnaced oil recovery from the un-produced Wingfield Flags reservoir. The PEDL094 licence (Egdon 100%) is located between producing oil fields atGainsborough, Corringham and Glentworth and contains identified prospectivestructures. Licence PEDL130 is located to the north and west of the Eakring-Dukes Wood oilfield and contains a continuation of the Eakring structural trend. Egdon has100% of the conventional oil and gas rights over the licence with Alkane EnergyPlc having the rights to the mine gas and coal bed methane. The PEDL132 licence (Egdon 100%) is located to the east of Eakring-Dukes Woodand to the south and east of the Egmanton oil field. Structural leads arerecognised to the east and south of Egmanton on existing 2D sesimic data. The licence transfers are subject to approval by the Department for Business,Enterprise and Regulatory Reform (formerly the DTI). Commenting on the acquisition, Mark Abbott, Joint Managing Director of Egdonsaid: "We are pleased to have reached agreement with STAG for the acquisition of thesefour licences which significantly expands our acreage holdings in one of ourcore areas and has the potential of adding material reserves and resources tothe Egdon business. Our initial focus will be on the Eakring-Dukes Woodstructure where we have identified potential un-drilled areas, by-passed oil payand enhanced oil recovery opportunities. We will also be undertaking furthertechnical evaluation of a number of prospective areas currently identifiedwithin the other licences with a view to future drilling." For further information please contact: Egdon Resources Plc Mark Abbott, Joint Managing Director 01256 702 292Andrew Hindle, Joint Managing Director 0208 332 1200 Buchanan Communications Ben Willey 020 7466 5000Nicholas Melson 020 7466 5000 Seymour PierceJonathan Wright 020 7107 8000 Notes to Editors: Company Background Egdon is an established, UK-based energy company primarily focused on theonshore UK. Egdon also has exploration interests in the offshore UK and France.Egdon's shares are traded on the AIM market. The Company is developing two distinctive businesses: •An oil and gas exploration and production business which has a portfolio of twenty exploration licences containing identified oil and gas prospects ranging from discoveries under appraisal through to higher risk but higher reward "wild-cat" exploration prospects. •A gas storage business initially focused on the development of a major salt cavern gas storage facility on Portland, Dorset. Egdon plans to demerge the two businesses on or soon after 21 December 2007. In accordance with AIM rules - guidance for mining, oil and gas companies, theinformation contained in this announcement has been reviewed and signed off bythe Joint Managing Director of Egdon Resources Mark Abbott, a Geoscientist withover 21 years experience. This information is provided by RNS The company news service from the London Stock Exchange