EDR.L Regulatory News (EDR)

6 Apr 2005 07:00

Egdon Resources PLC06 April 2005 6th April 2005 For immediate release EGDON RESOURCES PLC EGDON FARMS OUT HEAVY OIL PROJECT IN FRANCE Egdon Resources Plc ("Egdon" or "the Company") is pleased to announce that itswholly owned subsidiary, Egdon Resources (New Ventures) Ltd, has reachedagreement, to farm out 22% of its interest in the St Laurent licence in Franceto Masefield Energy Holdings AG ("Masefield"). Egdon's working interest in thelicence will reduce from 42.850% to 33.423% on completion of the agreement whichis subject to French ministry approval. The St Laurent licence contains the undeveloped Grenade heavy oil accumulation.A recent independent report by RPS Troy-Ikoda determined that the oil-in-placewithin the structure was in the range of 68 to 485 million barrels of oil, witha Best Estimate of 221 million barrels of oil. The discovery well, Grenade SurAdour-1 was drilled by Elf in 1975 and found a 97 metre column of 10 degreeAPI oil. Although the well did flow on test it was subsequently plugged and abandoned in 1988 as non-commercial following intermittent testing between 1976 and 1985. In return for the licence interest, Masefield has agreed to fund work designedto determine the feasibility of producing and marketing the crude from theGrenade discovery. The licensees will submit documents to the French Ministry on 7th April 2005 torenew the licence for a further 3 years beyond the expiry of the first period on7th August 2005. The less prospective areas within the licence will berelinquished as part of the renewal, reducing the area under licence toapproximately 650 square kilometers. Commenting on the agreement, Egdon's Joint Managing Director, Mark Abbott, said"A number of new technologies have been developed in the past 20 years toenhance well production rates for heavy oils and their handling at the surface.The Company decided that the best way of progressing the development of thispotentially significant resource was to bring in a specialist company such asMasefield with management experience and access to proprietary technology insuch heavy oil operations". 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: Masefield Energy Holdings AG is a Swiss registered company with interests viasubsidiary companies in heavy oil projects, including Nautical Petroleum PLC, aspecialist energy company focussed on production of heavy crude oils fromdiscovered reserves in the United Kingdom Continental Shelf and QPS AG which hasaccess via Masefield Energy Holdings AG to proprietary heavy oil technologies. Egdon operates the St Laurent licence. The existing partners are alsoparticipating with Egdon in the farm-out. The new working interests in the StLaurent licence following completion of the agreement will be: Egdon Resources (New Ventures) Ltd 33.423%Sterling Resources (UK) Ltd. 33.423%Masefield Energy Holdings AG 22.000%Eagle Energy Limited 11.154% Company Background Egdon is an established, independent UK-based oil and gas exploration companyprimarily focused on the hydrocarbon-producing basins of the onshore UK. Egdonalso has exploration interests in the offshore UK and France. The Companyapplies advanced level exploration technology to the overlooked potential ofsuch areas. Egdon was formed in 1997 by Dr Andrew Hindle and Mark Abbott. In December 2004,Egdon's shares commenced trading on the Alternative Investment Market, havingbeen previously traded on Ofex since July 2000. The Company has acquired adiverse portfolio of nineteen exploration licences containing a significantnumber of identified oil and gas prospects. The licences cover a broad riskspread, ranging from discoveries under appraisal through to higher risk buthigher potential reward prospects. This information is provided by RNS The company news service from the London Stock Exchange