EDR.L Regulatory News (EDR)

16 May 2006 10:33

Egdon Resources PLC16 May 2006 16 May 2006 For immediate release EGDON RESOURCES PLC Portland-1 Operations Update Egdon Resources Plc (AIM : EDR), the onshore UK focused energy company, todayprovides an update on its gas storage project on the Isle of Portland in Dorset. Portland Gas Limited ('the Company'), a wholly owned subsidiary of EgdonResources Plc, is drilling the Portland-1 borehole on the Isle of Portland,Dorset to confirm that a halite sequence (called 'S7' by the Company), within aTriassic salt sequence ('Saliferous Beds') of the Wessex Basin, is suitable forthe creation of caverns to store natural gas. As previously reported, the top of the Saliferous Beds was encountered at adepth of 2139 metres. Following the setting of a 7 inch steel liner in the hole,coring of the sequence, using a wireline retrievable 4.2 metre core barrelwithin a 'PQ' coring string, commenced on 14 April 2006 at a depth of 2149metres. On 26 April, after cutting core number 32 at a depth of 2260.98 metres, the 'PQ'string jammed in the hole and whilst trying to pull it free the pipe parted at adepth of 1086 metres. During subsequent 'fishing' operations to retrieve the 'PQ' string that remained in the hole, the rig had mechanical problems whichfurther delayed the operations. The 'PQ' pipe was partially recovered to a depthof 2107 metres. On 12 May the decision was made to sidetrack the well at a depthof 2040 metres, drill the new hole section to 2250 metres (with the sidetrackedwell path programmed to be approximately 10 metres to the northwest of theoriginal hole at this depth) and then resume coring using a conventional 18metre core barrel on the end of drilling pipe. At 06:00 hours today the window in the 7 inch steel liner had been cut anddrilling operations will resume within the next 24 hours. It is anticipated thatcoring will re-start within the next 3 days. The top of the S7 sequence was encountered at a depth of 2235 metres (to beconfirmed by wireline logging after the Saliferous Beds has been drilled). Corehas been recovered in the well to a depth of 2256.68 metres. To date, 117.68metres of the Saliferous Beds have been confirmed, of which 21.68 metres areinterpreted as the S7 sequence. The S7 is expected to be approximately 180metres thick at Portland-1. Core samples from the section already drilled have been taken to laboratories inGermany to enable the Company to start a series of tests to confirm thesuitability of the Saliferous Beds on the Isle of Portland for the developmentof a gas storage facility and, if so, to optimise the design of the storagecaverns. The results of these tests are anticipated at the end of July 2006. Ifpositive, this will result in a planning application being submitted inSeptember or October 2006. For further information please contact: Egdon resources Plc Andrew Hindle, Joint Managing Director 01256 702 292 Mark Abbott, Joint Managing Director Buchanan Communications Eric Burns 01943 883 990 Ben Willey 020 7466 5000 Company Background Egdon is an established, UK-based energy company primarily focused on thehydrocarbon-producing basins of the onshore UK. Egdon also has explorationinterests in the offshore UK and France. Egdon's shares are traded on the AIMmarket. The Company is developing two major business areas: An oil and gas exploration and production business which has a portfolio oftwenty exploration licences containing identified oil and gas prospects rangingfrom discoveries under appraisal through to higher risk but higher reward "wild-cat" exploration prospects. A gas storage business initially focused on the prospective development of amajor salt cavern gas storage facility beneath the Isle of Portland, Dorset. 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 Dr Andrew Hindle, a CharteredGeologist with over 22 years experience. This information is provided by RNS The company news service from the London Stock Exchange