6 Feb 2023 07:00
6 February 2023
EGDON RESOURCES PLC
("Egdon" or "the Company")
Farmout Option Agreement Licence PL081
Egdon Resources plc (AIM:EDR), the UK Energy Company, is pleased to advise that it has entered into a Farmout Option Agreement (the "Agreement") with York Energy (UK) Holdings Limited ("York") relating to onshore Production Licence PL081 (the "Licence") in North Yorkshire.
The Licence contains the Weaverthorpe Prospect ("Weaverthorpe"). Weaverthorpe is a relatively shallow Bunter Sandstone (Triassic) prospect located immediately up-dip of interpreted gas pay in the Fordon-2 well (drilled by BP in 1974). Egdon's initial evaluation indicates an estimated Mean prospective gas resource of 58 billion cubic feet.
Under the terms of the Agreement Egdon has a period of six months from 3 February 2023 to elect to farm into the Licence (the "Option"). During the Option period, Egdon will undertake additional technical and operational work to de-risk the opportunity, including reprocessing of the vintage 2D seismic data and integration of this with the existing 3D seismic data which defines the western part of the prospect.
As consideration for the grant of the Option, Egdon will pay 100% of the 2023 licence fees.
Should Egdon exercise the Option, it will earn a 70% interest in the Licence and assume operatorship. As consideration Egdon will pay 100% of the costs associated with the planning, drilling, logging, and either short term testing and completion or plugging and abandonment of a well to test the Weaverthorpe Prospect.
In addition, on exercise of the Option, Egdon will pay York a cash sum of £100,000, less any licence fees that were paid by Egdon for 2023.
York has an agreement with the current operator, Third Energy UK Gas Limited ("Third"), entitling it to be assigned the entire legal and beneficial interest in PL081. Egdon will pay 100% of the costs associated with the transfer of the Licence from Third to York and to Egdon (Such transfer being subject to NSTA approval.)
Commenting on the Agreement Mark Abbott, Managing Director of Egdon, said:
"This farmout option for the Weaverthorpe Prospect represents a significant opportunity for Egdon to increase its exposure to a potentially material gas resource at a time when the UK's reliance on imported energy has come into sharp focus.
The deal structure secures the opportunity at low cost whilst we undertake additional technical due diligence through the application of modern seismic processing technology.
We look forward to updating shareholders on this exciting opportunity over the coming period."
For further information please contact:
Egdon Resources plc
Mark Abbott, Martin Durham 01256 702 292
Buchanan
Ben Romney, Jon Krinks 020 7466 5000
Nominated Adviser & Joint Broker - WH Ireland Limited
Antonio Bossi, Chris Hardie, Megan Liddell 020 7220 1666
Joint Broker & Financial Advisors - VSA Capital Limited
Andrew Monk, Andrew Raca 020 3005 5000
About Egdon
Egdon Resources plc (LSE: EDR) is an established UK-based energy company focused on onshore exploration and production in the UK.
Egdon holds interests in 35 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.
About York
York Energy (UK) Holdings Limited is a private UK-based energy company focused on exploration and production activities in Europe. York is part of the Alpha Energy group (www.alpha.energy) and an affiliate of Alpha Oil & Gas LLC, an operator of assets in the US.
York currently has rights to 100% interest in the PL081 licence in the UK and 100% interest in the Ichnyanska Production Sharing Agreement in Ukraine, which allows York to produce hydrocarbons from a 500,000+ acre area located within Ukraine's primary oil & gas province.