10 Jul 2017 07:00
10 July 2017
EGDON RESOURCES PLC
("Egdon" or "the Company")
UK Onshore Producing Oil Field Acquisition - Fiskerton Airfield
Egdon Resources plc (AIM:EDR) is pleased to announce the acquisition of the producing Fiskerton Airfield oil field in Lincolnshire licence EXL294.
Egdon Resources plc (or "the Company") will acquire a 100% interest in, and operatorship of the Fiskerton Airfield oil field from Cirque Energy (UK) Ltd ("Cirque") for a cash consideration of $750,000 (c. £0.58 million) payable from existing cash resources upon completion. The effective date of the acquisition will be 1 January 2017.
The Fiskerton Airfield oil field is located approximately 7 kilometres to the East of the City of Lincoln. The field was discovered in 1997 and cumulative production has totalled around 440,000 barrels of oil from the most likely mapped Oil in Place estimated at 2.2 million barrels. The oil is of good quality (35.2°API) and is exported by road tanker to Immingham, North East Lincolnshire. Egdon estimate that in excess of 100,000 barrels of oil remain recoverable from the existing wells.
The field is currently producing circa 19 barrels of oil per day ("bopd") from one of two production wells (FA-3). The second producing well (FA-1) is currently shut-in awaiting a workover. The field also has a dedicated water disposal well to reinject produced water into the reservoir for pressure support (FA-2). The field has suffered from a lack of investment in recent years. Egdon plans to enhance the cash flows and profitability of the operation by increasing production initially to between 30 and 40 bopd via low cost well interventions. It is planned to workover both the currently producing FA-3 and the shut-in FA-1 wells during 2017 by installing new tubing, pumps and isolating water producing zones.
Completion of the acquisition is subject to the usual OGA approvals.
Commenting on the acquisition, Mark Abbott, Managing Director of Egdon Resources plc, said:
"We are pleased to acquire the Fiskerton Airfield oil field for a modest cash outlay. The field has suffered from a lack of investment over recent years and we plan to undertake simple low-cost workovers to enhance production and profitability in the short-term, adding valuable near-term cash-flow to Egdon's portfolio. In the longer term, we will investigate the potential to enhance productivity through in-fill drilling."
For further information please contact:
Egdon Resources plc
Mark Abbott 01256 702 292
Buchanan
Richard Darby, Anna Michniewicz 020 7466 5000
Nominated Adviser and Broker - Cantor Fitzgerald Europe
David Porter, Sarah Wharry (Corporate Finance) 020 7894 7000
Mark Westcott (Sales)
Joint Broker - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
AIM Rule Disclosure
The acquisition of the interest in the Fiskerton Airfield oil field is a substantial transaction as defined in the AIM Rules for Companies ("AIM Rules"). With respect to disclosures required under the AIM Rules for substantial transactions, due to a lack of historical financial information available to the Company with respect to Cirque's activities at the oil field, the Company is not able to provide disclosure on the profits or losses attributable to the interest in the Fiskerton Airfield oil field in this announcement. Egdon has a thorough understanding of current and likely future operating costs on the field and the costs of the planned workovers. The Company will record the acquisition in its books at the purchase cost.
Notes to Editors:
Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company focused on onshore exploration and production in the hydrocarbon-producing basins of the UK.
Egdon holds interests in 44 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.
Evaluation of hydrocarbon volumes has been assessed in accordance with 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).
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.