REG - Egdon Resources PLC - Final results for the Year Ended 31 July 2016 <Origin Href="QuoteRef">EGRE.L</Origin> - Part 2

Egdon ResourcesAnnouncement

01/11/2016 07:06

- Part 2: For the preceding part double click  ID:nRSA9294Na 

between 2017 and 2021. 
 
During the prior year an increase of £602,801 was recorded in respect of the
provision for the decommissioning of the Ceres Gas Field. 
 
Other provisions represent the amount expected to be payable to the former
shareholder of Egdon Resources Avington Ltd under the Net Profit Interest
agreement entered into at the time of acquisition. Of the total provision,
£3,117 (2015: £4,217) is estimated to be payable within one year. 
 
6. Exploration costs written off, impairments and pre-licence costs 
 
Exploration costs written off, impairments and pre-licence costs for 2016
include an impairment charge of £825,000 relating to the Waddock Cross
(£311,000) and Keddington (£514,000) oil fields and an impairment credit
reversing impairments charged in prior periods of £182,000 relating to the
Ceres Gas Field. The impairment charge has arisen primarily as a consequence
of production issues and weak forward oil prices that have impacted on
production and revenue expectations. In the case of the Ceres field, the
impairment reversal arises as a consequence of sustained production which has
resulted in a re-evaluation of remaining recoverable reserves.  The
recoverable amounts are based on estimated residual values of the wider
licence area plus pre tax value in use assessed from forecast production, gas
prices per therm of 34p-43p, oil prices per barrel of US$43 to US$70 and a
discount rate of 8%. 
 
Exploration costs written off, impairments and pre-licence costs for 2015
include an impairment charge of £478,667 relating to the Waddock Cross oil
field and impairment reversals relating to the Ceres Gas field (£500,000) and
the Kirkleatham Gas Field (£500,000). 
 
7. Acquisition of Yorkshire Exploration Limited 
 
On 2 December 2014, Egdon Resources plc completed the acquisition of Yorkshire
Exploration Limited.  The company, which holds an 8% interest in PEDL068 which
includes the Kirkleatham gas field and the Westerdale prospect, was acquired
for consideration of Egdon shares with a fair value of £75,000.  The Group
acquired the company in order to increase its exposure to the PEDL068
licence. 
 
Negative goodwill arising on acquisition of the subsidiary represented the
excess of the fair values of the assets less the liabilities acquired over the
fair value of the consideration.  The purchase was an off-market transaction
offered to the Group for reasons personal to the vendor. 
 
8. Post Balance Sheet Events 
 
On 22 August 2016 Egdon announced the acquisition of an additional 20%
interest in PEDL068 from DESS Energy Limited ("DESS") bringing the Company's
total interest in the licence to 68%.  As consideration for this acquisition,
Egdon will bear DESS's retained 20% share of ongoing expenditure for a period
of six months and in addition will accept liability for DESS's 20% share of
the existing abandonment liability for the Kirkleatham site and Kirkleatham-1
well, but not for any future works. 
 
On 26 October 2016 Egdon announced the acquisition at zero cost of additional
interests in two 14th Round licences from Celtique Energie Petroleum Limited. 
Egdon acquired 22.5% interest in PEDL334 and 11.25% interest in PEDL306,
taking the Company's total equity in the licences to 60% and 30%
respectively. 
 
9. Annual General Meeting 
 
The Annual General Meeting will be held at the offices of Norton Rose
Fulbright, 3 More London Riverside, London, SE1 2AQ at 11.00 hours on 8th
December 2016. 
 
This information is provided by RNS
The company news service from the London Stock Exchange