2 Apr 2020 07:00
2 April 2020
EGDON RESOURCES PLC
("Egdon" or "the Company")
Coronavirus (COVID-19) and Trading Update
Egdon Resources plc (AIM: EDR) provides an update on the impact of COVID-19 on the business and an update on current trading.
The coronavirus pandemic represents an unprecedented national and international public health emergency which has impacted many aspects of our daily lives and which we hope to see resolved quickly. The primary concern and focus for the Company at this time is the health and safety of our employees, contractors and other stakeholders.
In this regard, Egdon's office-based employees have been working from home since 19 March 2020 using well established systems to maintain full functionality and the ability to do so for however long the current Government guidance is maintained. I am pleased to report that to date there have been no incidents of infection within our workforce.
Our currently operational sites - Keddington and Fiskerton Airfield - are managed by a third-party contractor and we have jointly established procedures and plans to ensure continuing safe functioning of the sites within the oversight of existing government regulation. Oil and gas workers are considered by the Government to be 'key workers'. As such, travel to and from site remains unrestricted as does the transportation of produced oil to the nearby refinery.
We will continue to monitor the situation and act within Government guidelines as matters develop but at this stage do not anticipate any adverse impacts to our production operations.
As announced on 26 February 2020, production during the six months ended 31 January 2020 was 178 barrels of oil equivalent per day ("Boepd") (H1 2019: 164 Boepd). Revenue during the six months to 31 January 2020 was £0.675 million (H12019: £1.21) which reflects the lower gas prices seen through the winter of 2019/20. Production remains within guidance of 130-140 Boepd for the full financial year (ending 31 July 2020).
The coronavirus pandemic and the resultant international actions have adversely impacted worldwide oil demand which has largely contributed to the current low oil price environment. In common with our peers, our current late field life production is unprofitable at these current prices and we are reducing costs wherever possible.
Given the current reduction in predicted oil and gas forward prices, non-cash impairments will be made in our Interim Results on a small number of assets. These impairments are expected to be of the order of c.£2.5-3.0 million out of total non-current assets of £31.94 million.
The Company is focussed on reducing costs and expenditure and concentrating on progressing key near term cash generative projects such as Wressle. We will continue to keep future activity under review in light of the current circumstances and are positioning the Company for growth once normality returns to the economy and oil markets.
The Company will be releasing its Interim Results for the six months ended 31 January 2020 on 21 April 2020.
For further information please contact:
Egdon Resources plc
Mark Abbott / Martin Durham 01256 702 292
Buchanan
Ben Romney, Chris Judd 020 7466 5000
Nominated Adviser and Joint Broker - Cantor Fitzgerald Europe
David Porter/ Rick Thompson (Corporate Finance) 020 7894 7000
Caspar Shand Kydd (Sales)
Joint Broker - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
Notes to Editors:
Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company focused on onshore exploration and production in the hydrocarbon-producing basins of the UK.
Egdon holds interests in 44 licences in the UK and has an active programme of exploration, appraisal and development within its portfolio of oil and gas assets. Egdon is an approved operator in the UK. Egdon was formed in 1997 and listed on AIM in December 2004.
Qualified Person Review
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, this release has been reviewed by Mark Abbott, Managing Director of Egdon, who is a geoscientist with over 30 years' experience and is a member of the Petroleum Exploration Society of Great Britain and a Fellow of the Geological Society. Mr Abbott has consented to the inclusion of the technical information in this release in the form and context in which it appears.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.