REG - Egdon Resources PLC - Farmout Option Agreement Licence PL081

Egdon ResourcesAnnouncement

06/02/2023 07:00

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RNS Number : 9181O  Egdon Resources PLC  06 February 2023

6 February 2023

EGDON RESOURCES PLC

("Egdon" or "the Company")

Farmout Option Agreement Licence PL081

Egdon Resources plc (AIM:EDR), the UK Energy Company, is pleased to advise
that it has entered into a Farmout Option Agreement (the "Agreement") with
York Energy (UK) Holdings Limited ("York") relating to onshore Production
Licence PL081 (the "Licence") in North Yorkshire.

The Licence contains the Weaverthorpe Prospect ("Weaverthorpe"). Weaverthorpe
is a relatively shallow Bunter Sandstone (Triassic) prospect located
immediately up-dip of interpreted gas pay in the Fordon-2 well (drilled by BP
in 1974). Egdon's initial evaluation indicates an estimated Mean prospective
gas resource of 58 billion cubic feet.

Under the terms of the Agreement Egdon has a period of six months from 3
February 2023 to elect to farm into the Licence (the "Option"). During the
Option period, Egdon will undertake additional technical and operational work
to de-risk the opportunity, including reprocessing of the vintage 2D seismic
data and integration of this with the existing 3D seismic data which defines
the western part of the prospect.

As consideration for the grant of the Option, Egdon will pay 100% of the 2023
licence fees.

Should Egdon exercise the Option, it will earn a 70% interest in the Licence
and assume operatorship. As consideration Egdon will pay 100% of the costs
associated with the planning, drilling, logging, and either short term testing
and completion or plugging and abandonment of a well to test the Weaverthorpe
Prospect.

In addition, on exercise of the Option, Egdon will pay York a cash sum of
£100,000, less any licence fees that were paid by Egdon for 2023.

York has an agreement with the current operator, Third Energy UK Gas Limited
("Third"), entitling it to be assigned the entire legal and beneficial
interest in PL081. Egdon will pay 100% of the costs associated with the
transfer of the Licence from Third to York and to Egdon (Such transfer being
subject to NSTA approval.)

 

Commenting on the Agreement Mark Abbott, Managing Director of Egdon, said:

"This farmout option for the Weaverthorpe Prospect represents a significant
opportunity for Egdon to increase its exposure to a potentially material gas
resource at a time when the UK's reliance on imported energy has come into
sharp focus.

The deal structure secures the opportunity at low cost whilst we undertake
additional technical due diligence through the application of modern seismic
processing technology.

We look forward to updating shareholders on this exciting opportunity over the
coming period."

 

 

For further information please contact:

Egdon Resources plc

Mark Abbott, Martin
Durham
01256 702 292

 

Buchanan

Ben Romney, Jon
Krinks
020 7466 5000

 

Nominated Adviser & Joint Broker - WH Ireland
Limited

Antonio Bossi, Chris Hardie,  Megan Liddell
                           020 7220 1666

 

Joint Broker & Financial Advisors - VSA Capital Limited

Andrew Monk, Andrew Raca
                                        020 3005 5000

 

 

About Egdon

 

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

Egdon holds interests in 35 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.

About York

 

York Energy (UK) Holdings Limited is a private UK-based energy company focused
on exploration and production activities in Europe. York is part of the Alpha
Energy group (www.alpha.energy) and an affiliate of Alpha Oil & Gas LLC,
an operator of assets in the US.

York currently has rights to 100% interest in the PL081 licence in the UK and
100% interest in the Ichnyanska Production Sharing Agreement in Ukraine, which
allows York to produce hydrocarbons from a 500,000+ acre area located within
Ukraine's primary oil & gas province.

 

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