LON:EDR | Egdon Resources EDR.L - General News

2nd Jul '10 by ManSiarad

27 comments 13874 reads

Edited/updated 19 April 2011

Time to revive this thread (which, to be honest, I had forgotten about), and shift discussion from the old thread, started by Doverbeach under the title "Egdon to acquire Encore's onshore / Ceres interests"

http://www.stockopedia.com/content/egdon-to-acquire-encores-onshore-ceres-interests-31974/

Old posts can be accessed through the link above, of course.

Today's (19th April 2011) announcement of interims provides a good opportunity. Link here:

http://www.investegate.co.uk/Article.aspx?id=201104190700111344F

Delays in bringing Kirkleatham into production and bringing Ceres back into production have proved rather frustrating over the last few months, as the MD notes in the statement, but the end now appears in sight - finally.

Plenty of newsflow on the horizon over the next few months, including increased production and well tests, while suifficient funds seem to be in hand.

There's a reasonable future programme of activity, both onshore UK and onshore France - the company website
http://www.egdon-resources.com/
provides a pretty good summary.

Egdon is fairly tightly held, with not a lot of stock coming on to the market (and generally with a fairly wide spread). Given their focus onshore (with the exception of the small interest in the UK North Sea Ceres gas field), I don't see them as being likely to come up with a major company-making discovery. Still, perhaps worth keeping an eye on for those interested in the continuing potential for quiet progress in the UK onshore.

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ManSiarad

26th May '11

Europa and Egdon have announced that the Surrey County Council Planning Committee have turned down trhe application for permission to drill the Holmwood-1 exploration well

The Egdon RNS

http://www.investegate.co.uk/Article.aspx?id=201105261014113390H

An appeal being considered - would have to be filed next month

Europa also advised that the combination of the very close voting result and the recommendation by the Planning Officers to allow the drilling, following an exhaustive review of the application, gives the Directors and partners sufficient justification to appeal this decision on the grounds that the decision to refuse was not made purely on the facts of the case.

The vote was tight: 6-4

Here's the BBC story

http://www.bbc.co.uk/news/uk-england-surrey-13548974

Here's the website of the opponents to the drilling - pretty well-organised, it would seem.

http://www.lhag.info/oilwell.cfm

With over 100 residents attending the Surrey County Council Planning Committee meeting, I wonder whether Europa under-estimated the sophistication of the local opponents.

Here's the Planning Officers' report, for those interested in ploughing through its 127 pages !

http://www.lhag.info/files/SCCReport.pdf

It's almost exactly a year, ( plus a day), since Europa announced that the County Council had asked that they should carry out more ecological studies.

I interpret this bit from the RNS

appeal this decision on the grounds that the decision to refuse was not made purely on the facts of the case.

as meaning that 'the facts of the case' exclude what DOES seem to have been fairly large-scale local opposition.

Simple NIMBYism, Cameron's 'Big Society' in action,or what?

No doubt the lawyers would relish an appeal. Perhaps better, (cheaper?) however, first to re-examine the seismic, come up with some other potential drilling locations and engage with the local residents to see if an option acceptable to them can be found?

And, apropos of Davjo's post #2 above, from last July:

In reply to ManSiarad, post #1

Thoughts?

thegreatgeraldo

Nimby forest gets a (temporary, hopefully) reprieve & the weather lets their county cricket team off the hook....grrrrr

davjo

Hmm - perhaps unwise to discount too heavily the potential weight of local opinion.

Indeed!...but it would be pretty pointless in issuing an exploration licence and then refusing permission to drill. I think I'd be tempted to sue the authority in such case.

Hoho, I'd be pretty sure you'd be wasting your money. It's not the issuer who's refusing!

This, in my experience, is a typical outcome. Protesters' will most likely have been invited to have their say at the meeting, with much emotion being expressed but scant attention being paid to the laws governing the proposal. Of course, lay Councillors' on the Planning Committee don't want to be seen by their electorate as ignoring their wishes. The important thing here is that Council Officers' apparently recommended approval. In this sort of application prior to the decision being taken, the Council should have done a pretty thorough job, checking out every detail to see that the application fully adhered to official guidelines. If they have done their job properly, I would fully expect the Government Inspector to agree with them and uphold any Appeal. Council Members' voting against, no doubt already know this but also know the finger won't be pointed at them....it'll be pointed at the Government Inspector in far away Bristol. Seen it all before ;-)

27th May '11

Actually, Davjo,

this comment repeated in my earlier post (#8) came from you ! (#2):

Indeed!...but it would be pretty pointless in issuing an exploration licence and then refusing permission to drill. I think I'd be tempted to sue the authority in such case.

Let's see what happens. I'm not up to speed with planning legislation. But in the current (political) environment, I wonder what the elected members of the (heavily Tory) County Council (and the local media) would make of a Government Inspector ruling that their decision should be overturned, on the basis of an appeal from Europa. There's not a lot of affection for bureaucrats,whether of a County Council or central government, riding roughshod over the expressed views of local residents, I suspect.

The lawyers would be happy, of course, (whichever way any appeal goes).

I still suspect that it might be worthwhile Europa trying to see if there's any alternative location for drilling that might be acceptable to the protesters, whether councillors or local residents. Even if the Government Inspector rules in favour of Europa's application, it would do the company's image no good if there were protesters out blocking wood-cutters, lorries and anything else associated with the drilling plans. Great pix for the media.... And adverse sentiment, as we know, can have a somewhat damaging effect on a company and its share price!

As I said in my first post on this thread:

Hmm - perhaps unwise to discount too heavily the potential weight of local opinion

Keddington-4 production testing update this morning:

http://www.investegate.co.uk/Article.aspx?id=201105270928464284H

The Keddington-4 well was drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, during April 2011 and encountered a total of 120 metres of the primary reservoir Unit 1 sandstone and 65 metres of Unit 2.

Site reinstatement works have been completed and the Keddington-4 well commenced pumping operations on Monday 23 May 2011 at 08.30 hours. After initial recovery of kill-brine and oil-based drilling mud, the well began free-flowing oil and gas through an adjustable choke and the pump was shut-off. The well has been shut-in periodically to observe pressure behaviour. Free-flowing production over a flowing period of 68 hours to 07.30 on 27 May 2011 has yielded 647 barrels of oil along with 1,106,300 million cubic feet of gas on a minimum choke setting. The production rate for the 24 hours to 07.30 hours on 27 May 2011 was measured at 234 barrels of oil per day ("bopd") and 518,000 cubic feet of gas per day ("cfg/d"). No formation water has been observed to date.

All sounds rather positive.

Actually, Davjo,

this comment repeated in my earlier post (#8) came from you ! (#2):

Hoho....I'm that much older and wiser now ;-)

I wonder what the elected members of the (heavily Tory) County Council (and the local media) would make of a Government Inspector ruling that their decision should be overturned, on the basis of an appeal from Europa. There's not a lot of affection for bureaucrats,whether of a County Council or central government, riding roughshod over the expressed views of local residents, I suspect.

Well, the point is whether the application fulfills the laws/official guidelines governing it, not local opposition unrelated to planning matters. I agree with you though, that Europa would much rather have everyone on board....not that that's ever possible. It's really a question of guaging what the opposition is based on and you can only do that by going through all the published objections. No doubt Europa would have undertaken an EIA and you'd probably have to go through that too. Not for me ;-)

Davjo,

since it's my weekend, I've just pottered through the Planning Officers' report

which has some interesting information contained therein - not so much about the presence, or lack of presence, of great crested newts and bats, but about the scale of the opposition to the application.

Thus two of the three local Parish Councils submitted objections, as did the Mole Valley District Council ("strongly opposes"). So did the Woodlands Trust, the National Trust and the board of the Surrey Hills Area of Outstanding National Beauty, AONB, along with nearly 1560 individuals and other bodies, including 635 from the local area and 483 from the rest of Surrey. The Surrey Wildlife Trust had no objection and nor did the County Ecologist and Diversity Manager (subject to various planning restructions being imposed).

A fairly powerful anti-lobby, though, locally based. I wonder if Europa handled the process of consultation and negotiation with the locals as effectively as they might have done ?

And I suspect that Europa may also not have done themselves an enormous amount of good by suggesting that the location was only a 'throwaway site', anyway, and that, if drilling was successful, they would have developed the field from another location anyway. Difficult, on that basis, to convince local people that this was the optimal location for the exploration well.

The report is an interesting read, IMO, for those who might want to understand the various issues / obstacles that companies face when applying for onshore drilling permission. It's a bit more complicated than simple Nimbyism, in my view. Though reading is probably left to a quiet weekend!

As a complete aside, I was amused to see that this Area of Outstanding Natural Beauty is actually located within a Foresty Commission plantation and isn't, apart from a very small strip, 'Ancient Woodland.' Reminds me of the time when my father applied for permission to build a bungalow at the top of our large garden, not too far from Holmwood. The application was turned down by the Planning Inspectors on the basis that the bungalow would be in an Area of Oustanding Natural Beauty. 'Natural? ', my father responded. 'It had been a derelict field for forty years before I spent another forty turning it into the garden you see today !'

We lost the appeal ....

The Leith Hill Action Group, which appears to have taken a lead in the public objections, wanted a legal agreement under which the Europa consortium would contribute to the refurbishment of the village hall, cricket pavilion and local church, along with a variety of other restrictions and constraints if they were ever to soften their opposition - you can't blame them for trying, I suppose !

Sounds as if they're pretty clued up on legalised bribery then! Seems to me that any opposition making such an offer recognises the weakness of their case on planning grounds, especially when the application is only a temporary one amounting to 3 years. I think Europa and partners are probably on strong ground to appeal. No doubt if they do so, it'll come with a commitment to invest in the local community to mitigate opposition. Bit like sinking water wells in Africa except Mole Hill residents are relatively filthy rich ;-)

10th Jun '11

Today's operations update from Europa EOG contains a couple of snippets of interest to Egdon

http://www.investegate.co.uk/Article.aspx?id=20110610070000PBE77

Exploration

With regard to UK exploration, Europa, Egdon Resources and Celtique Energie
have agreed, subject to DECC approval, to equalise working interests across
contiguous licences PEDL180 and PEDL182, situated to the south and east of
Crosby Warren. This will increase Europa's overall exposure to the play,
including the Broughton oil discovery and a joint 3D seismic survey planned for
later in 2011 will firm up drilling plans for the licences.

Following the decision by the Surrey Planning Committee to overturn the County
Planning Officer's recommendation to allow exploration drilling at Holmwood,
the Company has consulted counsel and in the light of their comments and
partners' support to appeal the decision, the intention is to move forward with
this process. Further updates will be provided in due course.

14th Jun '11

An RNS from Egdon on the deal with Europa EOG and Celtique Energie

http://www.investegate.co.uk/Article.aspx?id=201106141401234200I

Egdon have reached agreement with Europa Oil and Gas Limited ("Europa") and Celtique Energie Petroleum Ltd. ("Celtique") to equalise working interests across contiguous Petroleum Exploration and Production Licences ("PEDL") 180 and 182 in the East Midlands. Egdon is the current operator of PEDL182 and will assume operatorship of PEDL180. On conclusion of the transaction, which is subject to approval from the Department of Energy and Climate Change ("DECC"), Egdon will hold a 33.33% interest in both licences reducing from its current 50%. The transaction provides alignment for the planned exploration programme for this area, which contains a trend of oil prone structures including the Broughton oil discovery and Wressle Prospect, which spans the two licences. A joint 3D seismic survey is planned for later in 2011 to firm up drilling locations for the licences. It is hoped to drill during 2012 as part of a planned multi-well drilling programme in the East Midlands.

Egdon have also reached agreement with Celtique whereby Celtique will acquire a 25% interest in PEDL181 from Egdon, again subject to approval by DECC. Following completion, Egdon will hold a 25% interest. Europa is the operator of PEDL181 with a 50% interest.

plus an update on the Burton on the Wolds seismic programme

Elsewhere in the East Midlands, Egdon is pleased to report the successful completion of a 13 kilometre 2D seismic programme over the Burton on the Wolds Prospect in PEDL201 where Egdon holds a 50% operated interest. The Burton on the Wolds prospect is located on the southern margin of the Widmerpool Basin to the South-East of the Rempstone Oil Field and is a four-way dip-closed prospect associated with an underlying seismic anomaly. Indicative prospective resources are estimated by Egdon at around 1.5 million barrels.

1st Aug '11

Egdon have sold a small interest in the Avington field to two companies with which three of its directors are associated.

http://www.investegate.co.uk/Article.aspx?id=201108011233174882L

Sale of Interests in the Avington Oil field

Egdon Resources plc (AIM:EDR) is pleased to report that its wholly owned subsidiary Egdon Resources Avington Limited ("ERA") has reached agreement to sell a 10% interest in the Avington oil field under licence PEDL070, for £400,000 in cash.

Under the transaction, ERA has agreed to sell a 5% interest to IS E&P Limited and a further 5% interest in the licence to IS NV Limited (together the "IS Companies"). The consideration payable by each of the IS Companies for their respective 5% interests will comprise £200,000 in cash payable on completion and the assumption of their pro-rata shares of a Net Profit Interest ("NPI") payable to Heyco Energy Holdings S.L. The NPI varies between 5 and 10% dependent upon oil price. The effective date of the transaction is 1 June 2011.

The transfers of interest are subject to approval by the Department of Energy and Climate Change.

Prior to the transaction ERA held a 16.67% interest in PEDL070. Egdon Resources U.K. Limited also holds a further 20% interest in the licence meaning that on completion Egdon will retain an aggregate 26.67% interest in the licence and the Avington oil field.

The Avington oil field is located in the County of Hampshire and is operated by Star Energy Oil UK Limited. Oil is currently produced from the Jurassic age Great Oolite reservoir from two wells, Avington-2Z and Avington-3Z. Production averaged approximately 70 barrels of oil per day in June 2011.

The sale will reduce Egdon's daily production by a maximum expectation of 7 barrels of oil per day and reduce its Proven and Probable reserves by an estimated 23,000 barrels of oil. The contribution to net profit from the 10% interest for the eleven months to end June 2011 after depreciation and amortisation was £18,500 before tax (unaudited). The gross cash flow from the interest for the same period was £58,000 (unaudited). The carrying value of the asset sold as at 30 June 2011 was £422,390 (unaudited).

The proceeds of the sale, which will total £400,000 payable on completion, will be utilised on Egdon's active UK and French exploration, appraisal and development programme where the Company believes it can generate a better return on investment.

The IS Companies are private companies involved in oil and gas exploration and production. InfraStrata plc is a 50% shareholder in both companies although both companies have independent boards. Egdon directors Ken Ratcliff and Walter Roberts are also directors of InfraStrata plc and Walter Roberts and John Rix have shareholdings in the IS Companies. As such an independent committee of Egdon directors comprising Philip Stephens, Alan Booth and Mark Abbott was set up to consider the offers and negotiate and approve the transaction.

A reduction of 7 bpd isn't really material for Egdon these days, but the cash sum will come in handy for further exploration and development on their UK and French licences. A good deal for them, IMO.

3rd Aug '11

A quick operations update from Egdon, following their 31st July year-end.

http://www.investegate.co.uk/Article.aspx?id=201108031206356636L

MD's comments thus:

"We have made further good progress towards our long stated target of 500 boepd and achieved net Egdon production of 420 boepd during July 2011. The resumption of production at Ceres which is currently expected on conclusion of the maintenance shut-down of the Cleeton platform during September, along with the EWT at Waddock Cross should enable us to exceed our production target at this time.
We also look forward to the commencement of the Markwells Wood-1 well test which will determine if the discovery is commercial."

July production was from the Keddington, Kirkleatham and Avington fields.

For those who, like me, have been wondering what on earth has been happening with Ceres, here's the explanation:

The Ceres field in block 47/9c (Egdon 10% interest) is now in a position to produce following completion of repair work on the damaged Eris umbilical and resolution of hydrate issues in the flow lines. The Ceres field was brought back on stream on 13 June 2011 and was produced with some interruptions until 26 June 2011 when the field was shut-in due to annual maintenance at the Cleeton platform. Egdon have been advised that this shut-down is likely to last for a period of around sixty days with the expectation of a restart of sustained production during September 2011. Production occurred over seven days during June 2011 and average net Egdon gas production for the period was 1.6 mmscfg/d (c. 260 boepd).

So no dramas there - though I can't see why this couldn't have been said earlier.

Permission now received for production at Dukes Wood, which will also allow Kirklington 3z to come back on stream and an extended well test approved for Waddock Cross, so overall production should increase significantly over the next few months.

7th Sep '11

Testing of the Markwells Wood discovery due to start early October and to be completed mid-November:

http://www.investegate.co.uk/Article.aspx?id=20110907070000PDE4C

20th Sep '11

At last !

Production at Ceres has resumed.

http://www.investegate.co.uk/article.aspx?id=201109200700085266O

Egdon holds a 10% interest in Ceres and net Egdon production after Backout (the allocation of Ceres gas to replace the production at the Mercury and Neptune fields which have been shut-in to allow Ceres production) is expected to be around 1.2 million cubic feet of gas per day (200 barrels of oil equivalent per day).

7th Nov '11

Results out today

http://www.uk-wire.com/Article.aspx?id=201111070700195638R

Operational Highlights

· Production up 73% to 46,919 barrels of oil equivalent (2010: 27,056 barrels of oil equivalent).

· Kirkleatham gas field brought on production in April 2011

· Oil discovery made at Markwells Wood-1 to be tested during November 2011

· Drilled successful sidetrack at Keddington oil field

· Portfolio of 29 licences in UK and France as at 31 July 2011 (2010: 34)

Financial Highlights

· Profit for the year £4.08 million (31 July 2010: £0.24 million)

· Revenues during the period up 90% to £2.38 million (31 July 2010: £1.25 million)

· Exceptional profit on disposal of subsidiary company and assets of £4.3 million (31 July 2010: £0.4 million)

· Basic earnings per share of 3.12p (31 July 2010: 0.29p)

· Equity as at 31 July 2011 of £20.17 million (31 July 2010: £16.03 million)

· Net current assets as at 31 July 2011 of £3.28 million (31 July 2010: £1.49 million)

17th Nov '11

Egdon have farmed out an interest in PEDL206, adjacent to the blocks containing a couple of small fieldfs shortly due to re-enter production

http://www.uk-wire.com/Article.aspx?id=201111151037261125S

The licence contains the Kelham Hills abandoned oil field, which produced two million barrels of oil between 1941 and 1957. A number of leads and prospects have been defined on existing seismic data which will be the focus of future exploration activity.

Presumably advances in technology since 1957 mean that there's a good chance of further recovery.

And their annual report and accounts now available on their website.

www.egdon-resources.com

8th Dec '11

Today's AGM presentation now on the website:

http://www.egdon-resources.com/userfiles/file/EDR_AGM_Presentation_8%20December%202011.pdf

Production target revised down from 500 boepd to 400 boepd for "coming period due to reduced production from Kirkl;eatham", whle there are still hiccups with ceres proeduction offshore. Up to 12 wells and 3 seismic programmes possible over the next eighteen months.

14th Dec '11

A press story on the testing at Markwells Wood, quoting NOP boss Derek Musgrove

http://www.portsmouth.co.uk/news/local/east-hampshire/black_gold_pumped_up_from_the_ground_and_it_s_the_good_stuff_1_3333147

sounds a bit hyped up to me, but who knows ? An RNS later, one assumes, if it's as exciting as the reporter seems to think.

Thanks to MrContrarian on TMF for flagging it up.

23rd Dec '11

Egdon have sold 15 per cent of their Kirklington and Eakring-Dukes Wood fields to Nautical. Both are due to come into production in Q1 2012

http://www.investegate.co.uk/article.aspx?id=201112230700095330U&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Investegate+(Investegate+Company+Announcements)

6th Jan '12

Egdon has acquired from Encore a small stake in a licence immediately offshore of the Isle of Wight, adjacent to an existing onshore licence interest.

http://www.uk-wire.com/Article.aspx?id=201201060700090955V

Egdon Resources plc (AIM:EDR) is pleased to announce that EnCore Oil plc ("EnCore") will assign to Egdon its 7.5% interest in a newly offered offshore licence covering part blocks 98/13 and 98/14. This assignment is a consequence of the agreement by which Egdon acquired certain UK and French assets from EnCore, and which completed in 2010.

The new licence is located immediately offshore from existing Isle of Wight onshore licence, PEDL 240 where Egdon also has a 7.5% interest acquired from EnCore. The part blocks 98/13 and 98/14 cover the offshore extension from PEDL 240 of a prospect that has been mapped using both seismic and well data and is located in the same petroleum basin as the Wytch Farm oil field.

The assignment is subject to approval from Department of Energy and Climate Change.

I wonder if we'll see any indication this year of what Premier plan to do with EnCore's near-30 per cent stake in Egdon.

Egdon Resources EDR.L - general news

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ManSiarad

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