8 May 2013 07:00
8 May 2013
EGDON RESOURCES PLC
("Egdon" or "the Company")
Farm-out of interest in the Wressle Prospect (PEDL180)
Egdon Resources plc (AIM:EDR) is pleased to announce the farm-out of an interest in Petroleum Exploration and Development Licence 180 ("PEDL180"), located in Lincolnshire, to Union Jack Oil plc ("Union Jack"). The farm-out is a further example of delivering on the Company's strategy of farming out assets to manage risk and accelerate activity.
Under the terms of the agreement, Union Jack will pay 16.66% of the cost of the planned Wressle-1 exploration well to earn an 8.33% interest in PEDL180. If the well is successful and proves the existence of an economically developable hydrocarbon accumulation, Union Jack will also earn an 8.33% interest in the part of the field which is determined to extend into the adjoining Licence PEDL182. As a result of this farm-out, Egdon's exposure to the Wressle-1 well cost is reduced to 16.67%.
On completion, the licence interests in PEDL180 will be as follows:
Egdon Resources U.K. Limited 25.00% (Operator)
Celtique Energie Petroleum Limited 33.33%
Europa Oil & Gas Limited 33.34%
Union Jack Oil plc 8.33%
The transfer of interests is subject to approval by the Department of Energy and Climate Change.
PEDL180 was awarded in 2008 and is located on the western margin of the Humber Basin. The Wressle Prospect was originally identified and mapped using vintage 2D seismic data but has now been defined on proprietary 3D seismic data, which was acquired by Egdon in February 2012. The Prospect is located on trend with the producing Crosby Warren oil field and the Broughton-B1 oil discovery, both to the immediate northwest, and the Brigg-1 oil discovery to the immediate southeast. All contain oil in various different sandstone reservoirs within the Upper Carboniferous succession. The gross mean Prospective Resources at Wressle, as calculated by Egdon, are estimated to be 2.1 million barrels of oil.
The planned well will be drilled as a deviated well to a total depth of about 2300 metres (ca. 1850 metres TVDSS) and a maximum offset of approximately 1250 metres. It has been designed to intersect all of the prospective sandstone reservoirs in a structurally favourable position near the crest of the Wressle structure. A surface location for the well site has been identified and a lease agreed with the landowner. A planning application was submitted in March 2013 and subject to receiving planning consent, it is intended that the Wressle-1 well will commence operations in the third quarter of 2013 as part of a programme of drilling, which will include the Burton on the Wolds-1 exploration well in Licence PEDL201.
Commenting on the farm-out Mark Abbott, Managing Director of Egdon said:
"We are pleased to welcome Union Jack into PEDL180 and the drilling of the Wressle Prospect. The prospect is well defined on new 3D seismic data and has the right "address", being located between existing oil fields and discoveries. This farm-out is a further example of delivering on our strategy of managing both the technical and financial risks within our overall drilling portfolio. We now look forward to commencement of drilling operations in the East Midlands in the third quarter of 2013."
For further information please contact:
Egdon Resources plc | 01256 702292 |
Mark Abbott, Jerry Field | |
Buchanan | |
Richard Darby, Gabriella Clinkard, Tom Hufton | 020 7466 5000 |
www.buchanan.uk.com | |
Nominated Adviser and Broker - Cantor Fitzgerald Europe | 020 7894 7000 |
David Porter, Rick Thompson (Corporate Finance) | |
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 France.
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.
Evaluation of potential recoverable hydrocarbons has been assessed in accordance with 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).