1 Nov 2017 15:18
1 November 2017
EGDON RESOURCES PLC
("Egdon" or "the Company")
INEOS Acquires Interests in Egdon's Core Shale Gas Area
Egdon notes that INEOS Upstream Limited ("INEOS") has recently completed its acquisition of Total E&P Limited's ("Total") interests in certain UK onshore licences held jointly with Egdon in Gainsborough Trough area.
There is no change to Egdon's financial position or equity interests resulting from this transaction. Total's obligations to carry Egdon in respect of PEDL 139 and 140 have been taken over by INEOS in full.
Following completion of the acquisition the new equity interests in the licences are as outlined in the table below:
Licence | Region | Equity interests post transaction | Operator |
PEDL 139 | North Nottinghamshire | IGas 32%, INEOS 40%, Egdon 14.5%, ECorp 13.5% | IGas |
PEDL 140 | North Nottinghamshire | IGas 32%, INEOS 40%, Egdon 14.5%, Ecorp 13.5% | IGas |
PEDL 273 | Yorkshire | IGas 35%, INEOS 30%, Total 20%, Egdon 15% | IGas |
PEDL 305 | Yorkshire | IGas 35%, INEOS 30%, Total 20%, Egdon 15% | IGas |
PEDL 316 | Lincolnshire | IGas 35%, INEOS 30%, Total 20%, Egdon 15% | IGas |
INEOS has also acquired from Total, Opt-In rights to Egdon's operated licence PEDL209, as announced in April 2017, and the associated carry of £13.47m (£4.85m net to Egdon's 36% interest if the option is exercised).
Commenting on the deals, Mark Abbott, Managing Director of Egdon Resources plc, said:
"INEOS has made very substantial commitments to UK shale exploration and Egdon looks forward to working with INEOS in PEDL139/140. Equally we are pleased to welcome INEOS into our 14th Round licences and also to PEDL209 should INEOS exercise its option to participate.
We now look forward to the drilling of Springs Road-1 in 2018 and further proof of concept exploration across the play in Egdon's core area of Gainsborough Trough."
For further information please contact:
Egdon Resources plc
Mark Abbott 01256 702 292
Buchanan
Richard Darby, Anna Michniewicz 020 7466 5000
Nominated Adviser and Broker - Cantor Fitzgerald Europe
David Porter (Corporate Finance) 020 7894 7000
Caspar Shand Kydd / Alex Pollen (Sales)
Joint Broker - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
Notes to Editors:
Historical Total Deals with Egdon Resources et al
In January 2014, we announced two highly significant deals with Total, the first international major to take a position in UK shale-gas. The first was a farm-in by Total to licences PEDL139/140 where they will earn a 40% interest through a carried work programme of up to c. £28 million ($46.5 million) with a minimum commitment of c. £12 million. As a result of this and other linked transactions Egdon now holds a 14.5% interest in the licences, up from 13.5% previously, and received c. £0.37 million in cash in 2014 under inter-party agreements.
The second was a Farm-in Option Agreement in respect of PEDL209, whereby Total had an option, exercisable until 31 December 2015, to earn a fifty per cent interest in the licence by paying for an exploration programme of £13.47 million. Egdon received a cash payment of £0.92 million and retained the exploration rights at Laughton-1 (2016 dry hole) and two other prospects, all of which are purely conventional and were excluded from the option. In April 2017 Egdon entered into a new Opt-In Agreement with Total on PEDL209. Under the terms of the agreement, Total has an option to farm-in to unconventional resources exploration in PEDL209, exercisable until 31 December 2018 and to earn a 36% interest in the licence by paying Egdon's remaining 36% (together with Total's own 36% interest) of an exploration programme of up to a gross £13.47 million which would include seismic acquisition and the drilling of a well.
These transactions were intended to deliver a significant work programme designed to de-risk the Gainsborough Trough Bowland-Hodder shale-gas play. Since signature, we have completed 3D seismic acquisition over parts of PEDL139/140 and the operator completed a period of community engagement ahead of planning and permitting work culminating in the receipt of planning permission for Springs Road 1 & 2 wells in November 2016.
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 43 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 hydrocarbon volumes 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).
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.