REG - Egdon Resources PLC - Pre-AGM Financial and Operational Update

Egdon ResourcesAnnouncement

16/12/2021 07:00

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RNS Number : 8033V  Egdon Resources PLC  16 December 2021

 

 

16 December 2021

EGDON RESOURCES PLC

("Egdon" or "the Company")

Pre-AGM Financial and Operational Update

Egdon Resources plc (AIM:EDR) a UK-based exploration and production company
primarily focused on the hydrocarbon-producing basins of onshore UK, is
pleased to provide the following Financial and Operational Update ahead of its
Annual General Meeting. The meeting will be held at the offices of Norton Rose
Fulbright, 3 More London Riverside, London, SE1 2AQ at 11.30 am today.

Revenues

·      Unaudited revenue for the three-month period from August to
October 2021 was £1.085 million (2020: £0.173 million)

·      Revenue was primarily from Wressle and Ceres, and was despite
Wressle only recommencing flow on 19 August and the Ceres field being shut-in
for annual maintenance for 20 days during September

·      This is expected to translate into a step change in revenues and
cash flow for the Company for the current financial year, with full-year
revenue from the Company's 2020/21 financial year (£1.09 million) matched
after the first quarter of the current year (August to October)

Wressle PEDL180/182 (Egdon 30%):

·      The Wressle-1 well has continued to exceed our expectations since
the successful completion of the proppant squeeze and subsequent coiled tubing
operations on the 19 August 2021.

·      Works have been completed to upgrade the gas incineration system

·      Despite being flowed under a highly restricted choke (20/64
inch), whilst upgrade works are ongoing, Wressle produced at an average rate
of 666 barrels of oil per day (bopd) (c. 200 bopd net to Egdon) plus 368,000
cubic feet of gas over the last 7 days period (727 barrels of oil equivalent
per day)

·      No formation water has been produced to date

·      A secondary separator system has been designed and manufactured
and is expected to be installed before year end to optimise gas/oil separation

·      Early 2022 will see completion of testing of the full potential
of the well

·      Decisions will be made early in 2022 on the plateau production
rate, to match with the longer-term operational objectives and prudent
reservoir management of this important asset

·      Downhole pressure data has been acquired and is currently being
interpreted to further inform these decisions

·      The focus in 2022 will move to progressing the optimal method of
gas monetisation and finalising plans for the development of other hydrocarbon
bearing sequences to access the identified contingent resources, with
particular focus on the Penistone Flags reservoir

Ceres P1241 (Egdon 10%):

·      The Ceres Gas Field is undergoing a late-life renaissance for the
Company

·      Gas realisations averaged 195p/therm in October and November 2021
(an equivalent of $157/boe)

·      Given the low operating costs, strong gas market fundamentals and
forward curve we believe the field could remain profitable for some years to
come

Biscathorpe PEDL253 (Egdon 35.8%):

·      On 1 November 2021, the planning application for a side-track
drilling operation, associated testing and long-term oil production at the
Biscathorpe site, was refused by Lincolnshire County Council (LCC), despite
being recommended for approval by the Council's planning officers

·      The formal decision notice was issued on 6 December and we are
currently reviewing in detail the reasons for refusal with our planning and
legal advisors and considering our options which is likely to lead to an
appeal

North Kelsey PEDL241 (Egdon 50%):

·      Planning applications were submitted to LCC in early December to
extend the existing planning consents by twelve months and amend the proposed
bottom hole target location for the planned North Kelsey well

·      The applications have now been validated and the consultation
period has begun

·      Subject to receipt of planning consent this well could be drilled
later in 2022

 

Keddington PEDL005R (Egdon 45%):

·      A detailed sub-surface review of the Keddington oil field and
the surrounding licence area has highlighted an opportunity to increase
production via a new development side-track well for which planning consent is
already in place

·      Reservoir engineering work has been completed by ERCE and has
confirmed a target area in the south-east of the field which would add 85,000
to 120,000 barrels of recoverable oil

·      Well specific reservoir modelling and detailed well planning will
be completed in the coming period with a view to being in a position to drill
the side-track well during 2022

·      Additional near-field exploration opportunities have been
identified at Keddington South, (gross Mean Prospective Resources of 635,000
barrels of oil) and the Louth Prospect (gross Mean Prospective Resources of
600,000 barrels of oil) which could be accessed from the existing production
site in due course

Waddock Cross PL090 (Egdon 55%)

·      Reservoir modelling has shown that a new horizontal well on the
field could yield commercial oil production (500-800 bopd)

·      Given the large in-place oil volume (Mean oil in place of c. 57
million barrels of oil) Waddock Cross has been high graded as planning consent
and facilities are in place to test this significant opportunity

·      Well design and surface facilities design work has been completed

·      Further detailed design and costings are in preparation to
support a potential JV investment decision during 2022 to drill a side-track
well and reinstate production

Mark Abbott, Managing Director of Egdon, commented:

"Strong production performance and high oil and gas prices are combining to
provide the Company with material operating cashflows which strengthens the
balance sheet and will support our planned 2022 investment programme."

 

 

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

Chris Hardie, Megan
Liddell
020 7220 1666

 

Joint Broker & Financial Advisors - VSA Capital Limited

Andrew Monk (Corporate
Broking)
020 3005 5000

Andrew Raca (Corporate Finance)

 

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.

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