EDR.L Regulatory News (EDR)

13 Mar 2007 09:57

Egdon Resources PLC13 March 2007 13 March 2007 For Immediate Release EGDON RESOURCES PLC ("EGDON") Completion of the acquisition of the Keddington Oil Field, PEDL005 (Remainder), Onshore UK Egdon Resources Plc ("Egdon"), the onshore UK focused energy company, is pleasedto announce that it has completed the acquisition from Roc Oil (GB) Limited ("Roc") of its entire interest in UK Onshore Petroleum Exploration and Development Licence PEDL005 (Remainder), which incorporates the Keddington Oil Field. The consideration for the acquisition was £250,000 in cash. The Keddington Oil Field is located to the east of the town of Louth in thecounty of Lincolnshire. Oil production at Keddington is from a sandstonereservoir of Westphalian (Carboniferous) age at a depth of around 2180 metres.The field has two production wells; Keddington-1z, which is a pumped well whichwas producing around 20 to 30 barrels of oil per day ("bopd") with 50- 60% watercut, and Keddington-2y which was free-flowing oil at 10-15 bopd along with up to110,000 cubic feet of gas per day. The Keddington Oil Field has produced a total of 173,000 barrels of oil to date.Production to date is believed to represent only a small percentage of themapped oil in place, highlighting the potential for further production atKeddington. The Keddington Oil Field is currently not in production. The Keddington-1z wellhas been subject to tubing and pump problems in recent years and has beenshut-in since June 2006 waiting on a work-over rig. The Keddington-2y well hasnot been put back on production since a pressure survey in March 2006. Egdon is in the process of mobilising a work-over rig and equipment to site tore-complete the Keddington-1z well with new tubing, rods and a deeper set pumpto optimise pumped production from this well. At the same time Egdon willrestore free-flowing production from the Keddington-2y well. Egdon is alsoinvestigating the potential to utilise the produced gas in a gas engine alreadyinstalled at Keddington to generate electricity for use on site, thus reducingoperating costs. Prior to recommencing full-field production, Egdon will alsoundertake some improvements to the site access and is renewing all environmentalconsents. Commenting on the transaction, Mark Abbott, Joint Managing Director of Egdonsaid: "We are delighted to have completed the acquisition of the Keddington Oil Field.The next month will see a work-over of the Keddington-1z well which will addnear-term production and cash-flow in one of Egdon's core areas of the onshoreUK." For further information please contact: Egdon resources Plc Mark Abbott, Joint Managing Director 01256 702 292Andrew Hindle, Joint Managing Director Buchanan Communications Eric Burns 01943 883 990Ben Willey 020 7466 5000 Seymour Pierce Jonathan 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 portfolioof twenty exploration licences containing identified oil and gas prospectsranging from discoveries under appraisal through to higher risk but higherreward "wild-cat" exploration prospects. • A gas storage business initially focused on the development of a major saltcavern gas storage facility beneath the Isle of Portland, Dorset. In 2006, Egdon announced plans to demerge the two businesses during 2007. PEDL005 (Remainder) The PEDL005 licence is split into two sub-licences; PEDL005 (Remainder), whichis the subject of this acquisition; and PEDL005 (Saltfleetby) which contains theSaltfleetby Gas Field owned 100% by WINGAS Storage UK Limited ("WINGAS"), andwhich is not affected by this acquisition. In addition to the Keddington Oil Field, PEDL005 (Remainder) also contains theNorth Somercotes Prospect which is mapped on 3D seismic data. Egdon willre-evaluate this prospect as part of its re-assessment of the potential in thelicence. 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