EDR.L Regulatory News (EDR)

14 Jan 2008 12:15

Egdon Resources PLC14 January 2008 For Immediate Release 14 January 2008 EGDON RESOURCES PLC ("EGDON" or "the Company") Commencement of drilling operations at Grenade-3 well Egdon Resources Plc is pleased to announce the commencement of drillingoperations at Grenade-3, in Egdon's operated St Laurent Permit in SW FranceEgdon holds a 33.4% interest in the well. The COFOR MAS 3000 rig completed the rig move on 9 January 2008 and drillingoperations commenced at 12.00 hours on 10 January 2008. The Grenade-3 well willtake approximately 30 days to reach target depth. The Grenade-3 well is an appraisal of the Grenade heavy oil accumulation. Thediscovery well, Grenade Sur Adour-1, was drilled by Elf in 1975 and found a 97mcolumn of 10 degree API oil. Between 1976 and 1985 around 8,000 barrels of oilwere recovered from intermittent tests, the well being finally plugged andabandoned during a period of low oil prices in 1985. An independent report by RPS Troy-Ikoda in 2004 determined that the oil-in-placewithin the structure was in the range of 68 to 485 million stock tank barrels(MMStb), with a Best Estimate of 221 MMStb. During 2005 the Company acquired40km of 2D seismic and 12km2 of 3D seismic data over Grenade and, by integratingthe new data with both existing reprocessed 2D seismic data and the results ofan extensive regional core study, was able to better define the trap. Theresultant mapped trap is a large three-way up-dip pinch-out of the reservoir ona low energy carbonate platform. Based on this revised trapping model, Egdon hasdetermined a range of oil-in-place of 95 to 945 MMStb with a Best Estimate of300 MMstb. Grenade-3 is a step-out to the Grenade-1 discovery well and will be drilled as avertical pilot hole designed to confirm the oil column and reservoirdistribution. Contingent upon the results of this pilot hole, a horizontalsidetrack will be drilled and completed for a long term production test to beundertaken. The production test would utilise modern completion, pumping andviscosity reduction methods in the horizontal reservoir interval to determinethe likely recoverable reserves and commerciality of the Grenade oilaccumulation. For further information please contact: Egdon Resources PlcMark Abbott, Joint Managing Director 01256 702 292Andrew Hindle, Joint Managing Director 0208 332 1200 Buchanan CommunicationsBen Willey 020 7466 5000Nicholas Melson Seymour PierceJonathan Wright 020 7107 8000 Notes to Editors The co-venturers in St Laurent Permit are as follows: +------------------------------------+------------+|Company | Interest|+------------------------------------+------------+|Egdon Resources (New Ventures) Ltd | 33.423%|+------------------------------------+------------+|Sterling Resources UK Limited | 33.423%|+------------------------------------+------------+|Nautical Petroleum plc | 22.000%|+------------------------------------+------------+|Malta Oil and Gas PTY limited | 11.154%|+------------------------------------+------------+ 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 has developed two distinctive businesses; an oil and gas explorationand production business which has a portfolio of twenty exploration licences,and a gas storage business initially focused on the development of a major saltcavern gas storage facility on Portland, Dorset. Egdon plans to demerge the two businesses effective 17 January 2008. 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