EDR.L Regulatory News (EDR)

30 May 2006 07:01

Egdon Resources PLC30 May 2006 30 May 2006For immediate release EGDON RESOURCES PLC ("Egdon" or "the Company") Farm-Out Agreement - PEDL071 - Fraisthorpe Prospect Egdon Resources Plc, the onshore UK focused energy company, is pleased toannounce that Egdon and Joint Venture partner Sterling Resources (UK) Ltd ("Sterling") have reached agreement to farm-out their combined 90% interest(Egdon 50%, Sterling 40%) in North Yorkshire licence PEDL071, which contains theFraisthorpe Gas Prospect, to Granby Enterprises Limited ("Granby") and two UKsubsidiaries of Gas Plus Italiana S.p.A, Gas Plus E & P UK Limited and Gas PlusO & G UK Limited (together "Gas Plus"). Both Granby and Gas Plus are newentrants to the onshore UK. Under the farm out arrangements, Gas Plus and Granby will fund Egdon andSterling's full share of the drilling and testing costs for the proposedFraisthorpe-1 exploration well, up to a limit of £1.8 million, to earn a 35% and10% interest in PEDL071 respectively. Following the farm-out, Egdon will retaina 25% interest and operatorship of PEDL071. Under the terms of the farm-in,Granby will also provide Egdon with some technical assistance for the Licence onbehalf of itself and the joint venture. The Fraisthorpe-1 well will target a Permian Leman Sandstone prospect at a depthof around 1800 metres located some 7 kilometres to the south of the Caythorpegas field which produces from the same formation. A 2D seismic survey wasacquired over the prospect in May 2005. The interpretation of these data hasindicated that the prospect has potential for up to 56 billion cubic feet ("Bcf") of gas in place. A planning application is currently being prepared and, subject to planningapproval and operational constraints, the Fraisthorpe-1 well is anticipated tobe drilled by early 2007. Assignment of the licence interests to Gas Plus and Granby are subject to theapproval of the Secretary of State for Trade & Industry. For further information please contact: Egdon Resources Plc Mark Abbott, Joint Managing Director 01256 702292Andrew Hindle, Joint Managing Director Buchanan Communications Eric Burns 01943 883 990Ben Willey 020 7466 5000 Notes to Editors Participating Interests Following completion of the farmout arrangements and the assignment of interestsin the licence, the participating interests will be: Company Participating Interest %Egdon Resources Plc 25Sterling Resources (UK) Ltd 20Gas Plus E & P Limited 17.5Gas Plus O & G Limited 17.5Granby Enterprises Limited 10Sterling Energy Plc 10 Gas Plus O & G UK Limited and Gas Plus E & P UK Limited are subsidiaries of GasPlus Italiana S.p.A. an Italian independent natural gas Company within avertically integrated Group active in the exploration, production, supply, salesand distribution gas business, and is the third largest Italian operator interms of domestic gas production produced from 39 concessions, for 26 of whichit is operator. Granby Enterprises Limited is a wholly owned subsidiary of Granby Oil and Gasplc which was established in 2002 and listed on AIM in 2005 under the code GOIL.Granby is an oil and gas business focused on exploration in carefully selectedareas in the North Sea and elsewhere, and also on securing production anddevelopment projects. The current asset base of Granby comprises interests in13 UK offshore licences and one licence offshore Philippines. Egdon Resources Plc 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, Mark Abbott, a geophysicist withover 21 years experience. This information is provided by RNS The company news service from the London Stock Exchange