EDR.L Regulatory News (EDR)

15 Aug 2006 13:35

Egdon Resources PLC15 August 2006 15th August 2006For immediate release EGDON RESOURCES PLC Farm-out Agreement PEDL141 Nooks Farm Egdon Resources Plc (AIM : EDR), the onshore UK focused energy company, ispleased to announce that it has reached agreement with Seven Star Natural GasLimited ("Seven Star") for the farm-out of a 50% interest in StaffordshirePetroleum Exploration and Production Licence ("PEDL") 141 which contains theNooks Farm gas discovery. Under the terms of the agreement Seven Star will fully fund the planning for anddrilling of an appraisal/development well on the Nooks Farm accumulation withintwo years of this agreement. Subject to certain conditions being met, SevenStar will operate the drilling activity. Following the farm-in the licence interests will be as follows: Egdon Resources Plc 46% Seven Star Natural Gas Limited 50% Altwood Petroleum Limited 4% The Nooks Farm accumulation was discovered by Shell in 1982, with the NooksFarm-1a well encountering gas bearing sandstones of Carboniferous age at a depthof 430m relative to sea level. The well achieved a maximum flow rate of 1.12million cubic feet of gas per day on test. Estimates of the volumes of gas inplace at Nooks Farm have been independently assessed as being in the range of0.88 to 3.83 billion cubic feet of gas. Development options for Nooks Farm arelikely to involve on-site electricity generation. Seven Star, a wholly owned subsidiary of UK Onshore Gas Limited, also operatesProduction Licence ("PL") 213 which includes the Calow gas field nearChesterfield in Derbyshire which was developed by BP in the 1960's. Assignment of the licence interest to Seven Star is subject to the approval ofthe Secretary of State for Trade & Industry. Commenting on the agreement, Mark Abbott, Joint Managing Director of Egdon,said: "We are happy to have concluded agreement with Seven Star to progress activityon the Nooks Farm gas discovery. This project was not at the top of Egdon'spriority list so with the involvement of Seven Star we can now look forward tothe earlier potential development of Nooks Farm." For further information please contact: Egdon resources Plc Andrew Hindle, Joint Managing Director 01256 702 292 Mark Abbott, Joint Managing Director Buchanan Communications Kelly-Ann French 01943 883 990 Ben Willey 020 7466 5000 Egdon 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 whichhas a portfolio of twenty exploration licences containing identified oil and gasprospects ranging from discoveries under appraisal through to higher risk buthigher reward "wild-cat" exploration prospects. • A gas storage business initially focused on theprospective development of a major salt cavern gas storage facility beneath theIsle 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 Mark Abbott, a geophysicist withover 21 years experience. Seven Star Company Background Seven Star Natural Gas Limited is a wholly owned subsidiary of UK Onshore GasLimited, a private Company, which in addition to PL213 operates two contiguousPEDL's totalling 430 square kilometres in South Wales through furthersubsidiaries, Coastal Oil and Gas Limited and UK Methane Limited. This information is provided by RNS The company news service from the London Stock Exchange