26 Nov 2020 07:00
26 November 2020
EGDON RESOURCES PLC
("Egdon" or "the Company")
Wressle Development Update and Loan Facility
Egdon Resources plc (AIM: EDR, "Egdon") is pleased to provide an update on progress to first oil at the Wressle Oil Field Development ("Wressle" or the "Development") and to provide details of a loan facility for £1 million.
Wressle Development Update
Wressle is located in North Lincolnshire Licences PEDL180 and PEDL182 where the Company holds a 30% operated interest.
The site reconfiguration works have been completed and the installation of surface facilities is currently ongoing at the Wressle site. To date, the storage tanks and inspection gantry have been installed and work is advanced in respect of the electrical and control system installation. All works have been completed safely whilst operating under Egdon's "COVID secure" operating procedures. Delivery of all remaining equipment is expected to be completed during December, despite the many challenges posed by the impact of COVID-19 restrictions on the current supply chain operating environment.
The PEDL180 and PEDL182 Joint Venture has decided to defer the workover operations and final commissioning of Wressle until January 2021, eliminating any possible operating and supply chain issues associated with the December festive period shutdown.
As such, mobilisation of the workover rig will now take place immediately in the New Year, with the workover being completed and initial oil flows now anticipated during late January 2021.
Recent photographs of the Wressle development site can be found on Egdon's Twitter feed @EgdonResources.
Loan Facility
Egdon is also pleased to announce that it has secured a £1,000,000 loan facility.
A Facility Agreement and Charge Agreement (the Agreements) have been executed with Union Jack Oil plc which will provide the loan facility on commercial terms. The main terms of the Agreements are;
· 18 month term
· Principal sum payable at end of the term or in part or in full at any earlier time at the borrowers discretion
· Interest accrues on a daily basis on the outstanding loan amount at an interest rate of 11% per annum and is payable quarterly commencing on the earlier of the quarter following first production or on April 2021
· The loan is secured against an unencumbered 25% interest in the Wressle Project (PEDL180, and PEDL182), including the Wressle development project and associated infrastructure
Commenting, Mark Abbott, Managing Director of Egdon Resources plc, said:
"We are pleased to have secured this source of debt financing as we progress the Wressle development to first production during January 2021. Since the award of Planning Consent in January 2020, significant progress has been made despite the challenging operating environment.
Achieving commercial production from Wressle will have a significant and positive impact on Egdon's production and cash flow, with an expected net production increase of 150 barrels of oil per day. We note the recent strengthening of the market price for oil, which will further improve the economics of this already robust development, with a project break-even oil price of $17.62 per barrel.
We look forward to updating stakeholders on further progress early in the New Year."
For further information please contact:
Egdon Resources plc
Mark Abbott / Martin Durham 01256 702 292
Buchanan
Ben Romney, Chris Judd 020 7466 5000
Nominated Adviser & Joint Broker - WH Ireland Limited
Chris Hardie 020 7220 1666
Lydia Zychowska
Joint Broker - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
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 41 licences in the UK and has an active programme of exploration, appraisal and development within its portfolio of oil and gas assets. Egdon is an approved operator in the UK. Egdon was formed in 1997 and listed on AIM in December 2004.
Wressle
The Wressle-1 well was drilled in 2014 and tested in 2015. Egdon Resources has a 30.00% operated interest in the field. The Wressle-1 well has flowed oil and gas from three separate reservoirs, the Ashover Grit, the Wingfield Flags and the Penistone Flags. This totalled 710 barrels of oil equivalent per day from all zones. In September 2016 a Competent Person's Report made independent estimates of Reserves and Contingent and Prospective oil and gas Resources for the Wressle discovery of 2.15 million stock tank barrels classified as discovered (2P+2C).
Qualified Person Review
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, this release has been reviewed by Mark Abbott, Managing Director of Egdon, who is a geoscientist with over 30 years' experience and is a member of the Petroleum Exploration Society of Great Britain and a Fellow of the Geological Society. Mr Abbott has consented to the inclusion of the technical information in this release in the form and context in which it appears.
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.