6 Oct 2010 07:00
For Immediate Release 6 October 2010
EGDON RESOURCES PLC
("Egdon" or "the Company")
Completion of Sale of Egdon Resources (New Ventures) Ltd
Further to the announcement on 23 June 2010, the Directors of Egdon Resources plc are pleased to announce the completion of the sale of Egdon Resources (New Ventures) Ltd ("ERNV"), the holder of certain of Egdon's permit interests in France, to eCORP Oil and Gas UK Ltd ("eCORP") for a consideration of £4.5 million in cash.
The assets of ERNV at completion are a 60% interest in the Navacelles Permit, a 40% interest in the Gex Permit and a 40% interest in the Gex Sud Permit Application (the "Permit Interests").
In addition to the cash consideration Egdon has also been granted options to acquire a 6% interest in the Gex Permit, a 6% interest in any permit to be issued pursuant to the Gex Sud Permit Application and a 9% interest in the Navacelles Permit ("The Back-In Options" or "Options"). These Options are exercisable up to the later of two years from the 23 June 2010 (or in the case of the Gex Sud Permit Application two years from any licence award) or 60 days following plugging and abandonment of the relevant drilled well or the completion of initial testing of the first well on each permit, subject to an end-stop date of 23 June 2015. On exercise of any Back-In Option Egdon will pay to ERNV its pro-rata share of all costs incurred by ERNV on that permit together with the appropriate proportion of the original acquisition price.
Prior to completion, the French Ministry have confirmed that they do not oppose the transfer of the beneficial interests in the St. Laurent and Pontenx Permits previously held by ERNV to two newly-incorporated Egdon subsidiaries, Egdon Resources France Limited ("ERF") and Aquitaine Exploration Limited ("Aquitaine"). Once awarded to ERNV, the beneficial interest in the Donzacq Permit will also be transferred from ERNV to the new subsidiaries. ERNV will continue to hold the registered title to the interests in the St Laurent and Pontenx Permits, and when awarded the Donzacq Permit, while the legal transfer of these permit interests to ERF and Aquitaine undergoes the assignment process under the French Mining Code. Egdon and eCORP have entered into an agreement governing their relationship in respect of the rights and liabilities relating to these permit interests during this period which can take up to15 months.
Egdon will also provide eCORP with certain services in connection with the business and development of the Permit Interests under a Technical Services Agreement.
Commenting on the completion of the disposal of ERNV, Mark Abbott, Managing Director of Egdon said:
"The sale of ERNV to eCORP crystallises tangible value from these early-stage exploration projects and significantly strengthens Egdon's balance sheet.
The cash generated from this transaction gives us the opportunity to accelerate activity on a number of our projects including a renewed focus on higher potential exploration projects. We are also better positioned to take advantage of any acquisition opportunities which may arise.
Egdon retain access to upside value in these licences through the Back-In Option and we look forward to assisting eCORP through the provision of technical services in the exploration of the conventional and shale-gas potential of the ERNV permits.
France remains a key focus for Egdon, and the St Laurent and Pontenx Permit interests and the Donzacq Permit Application (which we expect to be awarded by year end), hold significant potential for Egdon and along with the two permits being acquired as part of the EnCore transaction (Mairy and Nimes) continue to provide Egdon with a significant operated opportunity base in France.
For further information please contact:
Egdon Resources plc
Mark Abbott 01256 702292
Buchanan Communications
Richard Darby, James Strong 020 7466 5000
Nominated Adviser and Broker - Seymour Pierce
Jonathan Wright, Richard Redmayne 020 7107 8000
Notes to Editors:
Egdon Resources plc
Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK and Europe.
Egdon currently holds interests in twenty nine licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets. Egdon is an approved operator in both the UK and France.
Egdon has production from the Keddington and Kirklington oil fields in the East Midlands and the Avington oil field in Hampshire. Further oil and gas production is anticipated from Kirkleatham and Ceres in 2010 and Waddock Cross in 2011.
On completion of the acquisition of Encore E&P Limited, Egdon will acquire a further two permits onshore France.
Egdon Resources plc listed on AIM in January 2008, following the demerger of its gas storage business, Portland Gas plc (now renamed Infrastrata plc). The pre-demerged business was formed in 1997 and listed on AIM in December 2004.
www.egdon-resources.com
eCORP Oil & Gas UK Limited
eCORP Oil & Gas UK Limited, a UK limited liability company, is a subsidiary of eCORP International, LLC, a Delaware limited liability company based in Houston, Texas and London, England. The eCORP companies develop, operate and own natural gas storage facilities, and develop and explore conventional and unconventional natural gas prospects in the US and Internationally. eCORP has been engaged in the research and development of unconventional hydrocarbon production since 1979. eCORP has been engaged in the development and operation of independently owned natural gas storage facilities and related assets since 1984.
www.ecorpusa.com
In accordance with the AIM Rules the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 23 years experience.
Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this announcement is subject to change without notice and the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.