20 Feb 2012 07:00
20 February 2012
EGDON RESOURCES PLC
("Egdon" or "the Company")
Farm-out of interest in PEDL201
Egdon Resources plc (AIM:EDR) is pleased to announce the farm-out of a 12.5% interest in Petroleum Exploration and Development Licence 201 ("PEDL201") located in Nottinghamshire and Leicestershire to Terrain Energy Limited ("Terrain") and Corfe Energy Limited ("Corfe").
Under the terms of the agreement, Terrain and Corfe will each pay 12.5% of the cost of the planned Burton on the Wolds-1 exploration well to earn a 6.25% interest. As a result Egdon's exposure to the well is reduced from 50% to 25% up to an agreed well cost. Terrain and Corfe have also agreed the same terms with Celtique Energie Petroleum Ltd ("Celtique").
On completion the licence interests in PEDL201 will be as follows:
Egdon Resources U.K. Limited 37.50% (operator)
Celtique Energie Petroleum Limited 37.50%
Terrain Energy Limited 12.50%
Corfe Energy Limited 12.50%
The transfer of interests is subject to the approval by the Department of Energy and Climate Change.
PEDL201 was awarded to Egdon and Celtique in 2008 and is located on the southern margin of the Widmerpool Gulf geological basin. The Burton on the Wolds Prospect has been mapped on proprietary 2D seismic data which was acquired by Egdon in May 2011. Evaluation has highlighted a prospect with targets at two distinct stratigraphic levels. The shallower target, the Rempstone Sandstone, is productive at the nearby Rempstone oil field and is mapped as having gross Best Estimate Prospective Resources of 1.4 million barrels of oil ("mmbo"). A seismic anomaly, possibly indicative of a carbonate reef, underlies the Rempstone Sandstone and has estimated gross Best Estimate Prospective Resources of 2.17 mmbo and would represent a new play in the basin.
The planned well will be shallow with a drilled depth of around 1000 metres to test both targets. A potential site has been identified and lease negotiations are progressing along with development of a planning application. Subject to planning it is intended that the Burton on the Wolds-1 well will now form part of Egdon's planned 2012 multi-well programme in the East Midlands.
Commenting on the farm-out Mark Abbott, Managing Director of Egdon said:
"The Burton on the Wolds Prospect combines a lower risk reservoir target offsetting nearby production with a higher risk, higher potential play at present untested in the basin. This farm-out agreement enables Egdon to promote the well up the drilling schedule whilst managing our risk and cost exposure on the prospect. We now expect to submit a planning application during the second quarter with a view to drilling before end 2012, subject to all statutory approvals."
For further information please contact:
Egdon Resources plc
Mark Abbott 01256 702292
Buchanan
Richard Darby, James Strong, Gabriella Clinkard 020 7466 5000
Nominated Adviser and Broker - Seymour Pierce
Jonathan Wright, Sarah Jacobs (Corporate Finance) 020 7107 8000
Richard Redmayne (Corporate Broking)
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 was formed in 1997 and listed on AIM in December 2004.
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, 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 26 years' experience.