Egdon Resources PLC Update on Licences P1929 and P2304 (1573P)
June 08 2020 - 01:00AM
UK Regulatory
TIDMEDR
RNS Number : 1573P
Egdon Resources PLC
08 June 2020
8 June 2020
EGDON RESOURCES PLC
("Egdon" or "the Company")
Update on Licences P1929 and P2304 and the Shell Farm-In
Egdon Resources plc (AIM:EDR) is pleased to provide an update on
UK offshore licences P1929 and P2304 ("the Licences") and the
Farm-In Agreement with Shell U.K. Limited ("Shell").
As advised on 21 January 2020, the farm-in by Shell was
conditional upon;
-- Receiving approval from the Oil & Gas Authority ("OGA"); and
-- Agreement of a mutually acceptable forward work programme and timeline with the OGA
In December 2019 Egdon announced that the OGA had granted
extensions to the Licences to 31 May 2020. I am pleased to report
that the OGA has now agreed to extend further the licence terms and
amend the work obligations for both P1929 and P2304 as follows:
P1929 and P2304
The initial term of the Licences shall be extended to 31 May
2024; subject to fulfilling the following firm commitments;
a) by 31 May 2021, acquire 400 km(2) of 3D seismic in P1929 and P2304 or relinquish the Licences
b) by 30 November 2022, undertake to drill one well in either
P1929 or P2304 to a depth of 1700 metres True Vertical Depth Subsea
(TVDss), or 75 metres below the Base Permian Unconformity; or
relinquish the Licences
We will now progress the assignment of the licence interests and
operatorship of the Licences to Shell. On completion Egdon will
retain a 30% interest in the Licences. Under the terms of the
Farm-In Agreement, Shell will pay 85% of the costs of the
acquisition and processing of the 3D seismic survey covering both
the Resolution and Endeavour gas discoveries. The carry on the
acquisition costs will be capped at US$5 million gross, beyond
which Egdon would pay 30% of the survey costs. Furthermore, Shell
will also pay 100% of all studies and manpower costs through to the
well investment decision on the Licences.
Commenting on the update, Mark Abbott, Managing Director of
Egdon Resources plc, said:
"Working closely with our partner Shell, we are pleased to have
reached agreement with the OGA to extend the Licences coupled with
revised work obligations and timelines. We will now focus on
completing the licence assignments and transfer of operatorship to
Shell and progressing the planned appraisal activity on the
Resolution and Endeavour gas discoveries.
The first part of this work programme will be the acquisition of
a marine 3D seismic survey. We look forward to building on our
close working relationship with Shell and benefitting from their
substantial worldwide operational experience and expertise; notably
the development of carbonate reservoirs characteristic of the
Resolution and Endeavour discoveries."
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 and Joint Broker - Cantor Fitzgerald
Europe
David Porter/ Rick Thompson (Corporate Finance) 020 7894 7000
Caspar Shand Kydd (Sales)
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 44 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.
Resolution and Endeavour Gas Discoveries
A Competent Person's Report prepared by Schlumberger Oilfield UK
PLC (April 2019) reported Mean Contingent Gas Resources of 231
billion cubic feet of gas ("bcf"), with a P90 to P10 range of 100
to 389 bcf, attributable to the Resolution gas discovery (P1929).
The Resolution discovery was made by Total in 1966 when well
41/18-2 flow tested gas from the Permian aged Zechstein carbonate
(limestone) reservoir. Additionally, Egdon estimates that the
Endeavour gas discovery (P2304) contains Mean Contingent Resources
of 18 bcf, with a P90 to P10 range of 10 to 28 bcf.
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.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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