EDR.L Regulatory News (EDR)

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This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any investment decision in respect of Egdon Resources plc or other evaluation of any securities of Egdon Resources plc or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

1 November 2016

EGDON RESOURCES PLC

("Egdon" or the "Company")

Subscription of approximately £3m (gross) and proposed Open Offer of up to £2.06m (gross)

Egdon is pleased to announce the following developments:

· Subscription agreed to raise approximately £3m (gross), by the issue of 22,222,222 Ordinary Shares at 13.5p per share to HEYCO International, Inc. ("HEYCO International"), with shares expected to be admitted to trading on AIM on 11 November 2016.

· HEYCO International is an existing shareholder of Egdon and is a wholly owned subsidiary of HEYCO Energy Group, Inc., a company with significant experience in unconventional exploration and production.

· Open Offer to be made as soon as practicable to all Qualifying Shareholders to raise up to a further £2.06m (gross) by the issue of up to 15,227,843 shares at 13.5p per share.

Mark Abbott, Managing Director of Egdon, commented:

"We are delighted to have strengthened our balance sheet by securing this strategic funding from HEYCO International, an existing shareholder with extensive knowledge and experience of exploration and production of unconventional hydrocarbons. We are pleased that George Yates, the highly respected President of HEYCO International, has provided such positive support for our business model."

DETAILED INFORMATION

Egdon is pleased to announce a Subscription to raise gross proceeds of approximately £3m (the "Subscription") and a proposed Open Offer of up to £2.06m (the "Open Offer"), (together the "Fundraising").

The Subscription has been undertaken with an existing shareholder, HEYCO International.

It is the Board's intention that the net proceeds of the Subscription (being approximately £2.85m, after costs of approximately £0.15m) and any funds raised from the Open Offer, together with existing cash balances and net revenue received will be used to:

· Progress the development of the Wressle oil field (subject to receipt of the necessary consents)

· Progress the Company's 14th Round licence evaluations

· Progress the "A" prospect to drillable status

· Make targeted investments in the Company's existing producing assets and conventional exploration portfolio with a view to increasing production and cash flow

· Review and target potential new value adding opportunities

The Directors have given consideration as to the best way to structure the proposed equity fundraising, taking into account current market conditions, the composition of the Company's shareholder register and the Board's desire to give shareholders the opportunity to limit dilution where practicable.

The Directors have concluded that the structure of the fundraising by way of the Subscription and Open Offer is the most suitable option available to the Company and its shareholders as a whole. The Open Offer will provide an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares with the option to apply to subscribe for more Open Offer Shares pursuant to an excess application facility (the "Excess Application Facility"). The Subscription is not conditional upon the Open Offer taking place. Further details of the Open Offer are set out below and will be in the Open Offer Circular, which will be sent to shareholders as soon as practicable.

VSA Capital Limited ("VSA") is acting as Financial Adviser and Joint Broker to the Company in connection with the Subscription and Open Offer and Cantor Fitzgerald Europe Limited ("Cantor Fitzgerald") is acting as Nominated Adviser and Joint Broker.

The Subscription

The Company has entered into an agreement with HEYCO International to issue 22,222,222 new Ordinary Shares at an issue price of 13.5p per Ordinary Share (the "Subscription Price"), by means of a Subscription. The Subscription Price represents a discount of approximately 10.0% to the Volume Weighted Average Price of an Existing Ordinary Share in the seven days prior to today.

It is expected that Admission of the Subscription Shares will become effective and that dealings will commence in the Subscription Shares at 8.00 a.m. on 11 November 2016.

The Open Offer

In order to provide Qualifying Shareholders with an opportunity to participate in the Fundraising, the Company is proposing to launch a 1 for 16 Open Offer of up to 15,227,843 Open Offer Shares at an issue price of 13.5p per Ordinary share, being the same price as the Subscription Price.

The timing for the Open Offer will be notified in due course and will be set out in the Open Offer Circular to all shareholders, which will be sent to Qualifying Shareholders as soon as practicable and will be available on the Company's website www.egdon-resources.com from the date this is issued.

In the event that the Open Offer is not fully subscribed by Qualifying Shareholders, VSA and Cantor Fitzgerald will have the ability to place any remaining shares with other investors.

The Open Offer Shares and the Subscription Shares will, upon issue, rank pari passu with the Company's Existing Ordinary Shares.

Following the issue of the Subscription Shares the enlarged ordinary share capital of the Company will be 243,645,490 Ordinary Shares. Following the issue of the Open Offer Shares (assuming full take-up under the Open Offer including the Excess Application Facility), the enlarged ordinary share capital of the Company will be 258,873,333 Ordinary Shares.

HEYCO International is currently interested in 9,388,346 Ordinary Shares representing approximately 4.24% of the existing issued share capital of the Company. HEYCO International has agreed to subscribe for 22,222,222 Subscription Shares and therefore, following the Subscription, HEYCO International will be interested in 31,610,568 Ordinary Shares, representing approximately 12.97% of the Company's issued share capital as enlarged by the Subscription.

Contact Information

Notes to Editors:

Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK.

Egdon holds interests in 43 licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets. Egdon is an approved operator in both the UK and France.

Egdon was formed in 1997 and listed on AIM in December 2004.

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 26 years' experience.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.