EDR.L Regulatory News (EDR)

10 Jan 2006 16:05

Egdon Resources PLC10 January 2006 10th January 2006 For immediate release EGDON RESOURCES PLC Operations Update Egdon Resources Plc ("Egdon" or "the Company") is pleased to provide an updateon drilling and testing operations on its UK operated licences. The BDF28 drilling rig has completed drilling and logging operations atKirkleatham-4 on licence PEDL068. The Kirkleatham-4 well reached a TD of 936mwithin rocks of Carboniferous age on the 7th January 2006. During drilling gasshows were encountered within the target Permian age Zechstein carbonates.Logging operations have now been completed and confirmed the presence of a c.19m gas column within the Cadeby Formation. The top of the Cadeby Formation waspenetrated at 804.3m where a drilling break and high gas readings were observed.Evaluation of wireline log data indicates high gas saturations and goodporosity development within the gas bearing interval. The Kirkleatham-4 wellwill be completed with 7" casing and the BDF28 rig released. Testing operationswill be undertaken using a work-over rig. Further activity at Kirkleatham willbe assessed once test results have been evaluated. On completion of operations at Kirkleatham-4 the drilling rig will mobilise tothe Westerdale-1 well site in North Yorkshire where drilling operations areexpected to commence during the week of 16th January 2006. Westerdale-1 isdesigned to test an accumulation 50.5 m up-dip and 3.7 km to the north of theRalph Cross-1 gas discovery made by Home Oil Limited in 1966. Ralph Cross-1tested gas at flow rates of up to 6 million cubic feet of gas per day from a20.5 m gas column in fractured Zechstein carbonates. Additional reservoirobjectives are present in the Westerdale-1 well both within the Zechstein and inthe underlying Carboniferous sequences. Westerdale-1 will be directionallydrilled to a total depth of around 1250 m and will take around 21 days to drill. On completion of operations at Westerdale-1 the rig will move to Dorset to drillthe Portland-1 well which is designed to test the thickness and suitability of asalt sequence for the creation of caverns for gas storage. Site constructionhas commenced at the Portland-1 well site. The Company can also report that at Waddock Cross-3, testing operations areongoing in the horizontal section drilled in the Cycle 3 of the BridportSandstone. Initial results indicate pump constrained flow rates of 270 to 400barrels of fluid per day with an average 12% oil cut. This equates to 32 to 48barrels of oil per day. The produced oil has not experienced the emulsionproblems encountered with the Waddock Cross-2 well test. Downhole pressuregauges will be recovered during the next week and the data analysed to determineoptions for the future testing and development of the Waddock Crossaccumulation. For further information please contact:Egdon Resources Plc 01256 702292Mark Abbott, Joint Managing DirectorAndrew Hindle, Joint Managing Director Buchanan Communications 020 7466 5000Eric BurnsBen Willey Notes to the Editors: Kirkleatham-4 and Westerdale-1 are located in the PEDL068 licence in theCleveland Basin where the Company holds a 20% working interest but is carriedfor 10% of the first well, Kirkleatham-4, and also holds an option to increaseits interest to 25%. The Waddock Cross-3 well was drilled within the PL090 inthe Wessex Basin where the Company holds a 45% working interest. 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 was formed in 1997 by Dr Andrew Hindle and Mark Abbott. In December 2004,Egdon's shares commenced trading on AIM, having been previously traded on Ofexsince July 2000. The Company is developing two major business areas: 1) An oil and gas exploration and production business which has a portfolio of twenty exploration licences containing identified oil and gas prospects ranging from discoveries under appraisal through to higher risk but higher reward "wild cat" exploration prospects. 2) A gas storage business initially focused on the prospective development of a major salt cavern gas storage facility beneath the Isle of Portland, Dorset. This information is provided by RNS The company news service from the London Stock Exchange