REG - Egdon Resources PLC - Preliminary Results
08/11/2022 07:00
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RNS Number : 6015F Egdon Resources PLC 08 November 2022
8 November
2022
Embargoed
for 7.00am
EGDON RESOURCES PLC
("Egdon" or "the Group" or "the Company")
Preliminary Results for the Year Ended 31 July 2022
Egdon Resources plc (AIM: EDR), a UK-based exploration and production company
primarily focused on the hydrocarbon-producing basins of onshore UK, today
announces its preliminary results for the year ended 31 July 2022.
Operational and Corporate Highlights
· Egdon net production during the period increased by 160% to
84,894 barrels of oil equivalent ("boe") equating to 233 boe per day ("boepd")
(2021: 32,686 boe, 90 boepd).
· Wressle production has significantly exceeded forecast
expectations with average gross production during the period of 656 barrels of
oil per day ("bopd") at rates constrained by the EA Permit limits for gas
disposal and with zero water production to date.
· The Ceres gas field is providing a late life renaissance due to
the high gas price and low operating costs.
· Following the refusal of planning permission in November 2021 for
the drilling of a side-track well, testing and long-term production at the
Biscathorpe project, an appeal was submitted in April 2022.
· On 8 March 2022 a revised incentive package was put in place for
all employees through the issue of new share options and the cancellation of
all historical share options.
· On 14 March 2022, planning permission was refused to extend the
existing consents to drill the North Kelsey-1 exploration well and an appeal
was submitted in April 2022.
· On 5 April 2022, the Government announced that it had
commissioned the British Geological Survey to advise on the latest scientific
evidence around shale-gas extraction. Report delivered to BEIS on 5 July
2022.
· During April 2022, Shell advised Egdon of its intention to
withdraw from licences P1929 and P2304, containing the Resolution and
Endeavour gas discoveries. Egdon applied to the NSTA for an extension of time
to complete the 3D seismic programme.
· Egdon has assumed the operatorship of PEDL343, increased its
equity to 40% and agreed an extension to 20 March 2024. PEDL343 contains the
Cloughton gas discovery.
· Licences PEDL202 and PEDL130 were relinquished during the period.
Financial Performance
· Oil and gas revenues increased by over 530% during the period to
£6.91 million (2021: £1.09 million) as a result of significantly increased
production and strengthening commodity prices.
· Earnings before interest, tax, depreciation, amortisation, asset
impairments, impairment reversals and write-downs were £4.67 million (2021:
loss of £0.72 million).
· Post tax profit for the period of £3.30 million including £1.40
million of impairment reversals, £1.80 million of impairments and £0.15
million of write-downs and pre-licence costs (2021: loss of £1.68 million
including £0.48 million of write-downs, pre-licence costs and impairments).
· Basic earnings per share of 0.64p (2021: loss per share of
0.51p). Diluted earnings per share of 0.57p (2021: loss per share of 0.51p).
· Net current assets of £4.90 million (31 July 2021: £0.14) of
which cash and cash equivalents were £4.80 million (31 July 2021: £1.96
million).
· The Company has no borrowings following the repayment of a £1
million loan during May 2022.
Subsequent Events
· On 8 August 2022 the North Kelsey Planning appeal documentation
was submitted.
· On 8 September 2022 the Government announced the lifting of the
moratorium on hydraulic fracturing for shale-gas.
· Egdon was advised in October 2022 that the NSTA had consented to
Egdon's request for a twelve-month extension to the P1929 licence obligation
to acquire the 3D seismic. Egdon will now engage with the NSTA to confirm the
detailed expectation in relation to this and subsequent timelines. Should the
3D survey not be acquired by April 2023, P1929 will determine in May 2023.
Licence P2304 will be relinquished.
· A hearing was held on 11 October 2022 in relation to the
Biscathorpe planning appeal and we now await the Planning Inspector's
decision.
· On 27 October 2022 the Government reintroduced the moratorium on
hydraulic fracturing for shale-gas.
· Coincident with the release of its Preliminary Results, the
Company has updated its corporate identity and released a new website
(https://www.egdon-resources.com/).
Outlook
· Post-period-end production and revenues have continued to be
strong with unaudited August to October 2022 revenues of £2.07 million.
The key operational focus for the coming period will be:
· Maintaining and enhancing the strong production performance at
Wressle whilst progressing both the gas monetisation and Penistone Flags
development as priorities.
· To add reserves, production and revenues through the drill-bit in
both our exploration and development/re-development projects.
· To progress energy storage, hydrogen and renewable generation
projects.
Audiocast
The Company will host a live audiocast of the Results Presentation via the
Investor Meet Company at 10:00am on 8 November. Investors can sign up to
Investor Meet Company for free and add to meet EGDON RESOURCES PLC via:
https://www.investormeetcompany.com/egdon-resources-plc/register-investor
(https://urldefense.com/v3/__https:/www.investormeetcompany.com/egdon-resources-plc/register-investor__;!!H_q-o1I4kFo!iWTV4aF1wjRJJNTEwz6RCNJH45z5NTGG1_lOGH5tp8foPfdwkpnEinXWV3aJ3TyUukVNWev5ELJ4JNImqgSSwP6Cq68ik3Y$)
Commenting on the Results Egdon's Chairman, Philip Stephens said;
"Egdon has been transformed over the past year through growing revenues and
with a significantly improved outlook and operating environment.
The highlight has been the outstanding performance of the Wressle oil field
which along with production from our existing fields and high oil and gas
prices has resulted in a strong financial performance.
Despite the reintroduction of the moratorium on shale-gas by the Sunak led
government, we will continue to make the case for the strategic importance
that shale-gas could make to the UK's economy and security of supply.
In the meantime, Egdon will focus on progressing its conventional oil and gas
business and nascent energy transition projects to continue delivering long
term value to its shareholders."
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)
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.
Evaluation of hydrocarbon volumes has been assessed in accordance with the
2018 Petroleum Resources Management System (PRMS) prepared by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed
and jointly sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG), the Society of Petroleum
Evaluation Engineers (SPEE), the Society of Exploration Geophysicists (SEG),
the Society of Petrophysicists and Well Log Analysts (SPWLA) and the European
Association of Geoscientists & Engineers (EAGE).
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulations ("MAR"). Upon the publication of this announcement via Regulatory
Information Service ("RIS"), this inside information is now considered to be
in the public domain.
Chairman's Statement
I am delighted that your Company has been transformed over the past year
through growing revenues and with a significantly improved outlook and
operating environment.
The highlight of the year has clearly been the outstanding production and
financial performance of the Wressle oil field. The year has seen the positive
impact of Wressle combined with high oil and gas prices which along with
production from our existing fields has translated into a robust financial
performance for the Company
The tragic events in Ukraine and the weaponization of energy by Russia, have
seen gas prices in Europe reach unprecedented levels, leading to a renaissance
of our Ceres gas field and heralding a renewed focus by governments worldwide
on energy security and cost of supply.
The UK Government's Energy Security Strategy has belatedly recognised the
importance of UK oil and gas production. The national and local benefits of
indigenous oil and gas supplies are clear and even more compelling in the
context of the current energy crisis. Without indigenous oil and gas, the UK
will simply 'offshore' its emissions, employment, and fiscal benefits and be
at the mercy of international energy markets. This culminated in the lifting
of the moratorium on hydraulic fracturing for shale-gas by the Government on 8
September 2022. Unfortunately, this was reversed by the incoming Government on
27 October 2022.
Egdon remains well positioned to be at the forefront of any development of
shale-gas given its enviable acreage position in the Gainsborough Trough and
other shale-gas basins (151,742 net acres (614 km2) and 37.6 TCF gas in
place). We will continue to make the scientific, environmental and commercial
case that shale-gas should be part of the long-term solution to the UK's
energy needs and that this can be done in a safe and environmentally
sustainable manner.
The UK is committed by law to reaching Net Zero carbon emissions by 2050 and
Egdon has put in place a Climate Change Policy to guide and measure Egdon's
progress in this critical area. Whilst oil and gas are currently the Company's
core focus, we are always looking to the future and are reviewing and
progressing a number of opportunities in energy storage, hydrogen and
renewable energy spaces and expect to make further progress on these in the
coming period.
With these positive developments the Company believes the time is right for
the rebranding of Egdon as a modern, forward-looking, energy business and we
are pleased to present our new corporate identity and website
(https://www.egdon-resources.com (https://www.egdon-resources.com) ).
Financial and Statutory Information
The period has seen a significant strengthening of the financial position of
the Company. This has been driven by over a 530% increase in oil and gas
revenues during the period to £6.91 million (2021: £1.09 million) as a
result of significantly increased production and strengthening commodity
prices. The average realised price per barrel of oil equivalent was 144%
higher at $81.40/boe (2021: $33.35/boe).
Earnings before interest, tax, depreciation, amortisation, asset impairments,
impairment reversals and write-downs were £4.67 million (2021: loss of £0.72
million).
The overall profit for the period was £3.30 million including £1.40 million
of impairment reversals in relation to Ceres, Keddington, Avington, Waddock
Cross and Kirkleatham, as well as, impairments of £1.80 million in relation
to the write down of P1929 and P2304 and write-downs and pre-licence costs of
£0.15 million (2021: loss of £1.68 million including £0.48 million of
write-downs, pre-licence costs and impairments).
Cash and cash equivalents as at 31 July 2022 were £4.80 million (2021: £1.96
million) and net current assets stood at £4.90 million (31 July 2021: £0.14
million).
The Group has no borrowings (2021: £1.01 million) having repaid a £1 million
loan.
Whilst there were no fund-raising activities during the year (2021: £3.35
million), a total of 8,465,000 warrants were exercised during the period
resulting in cash of £0.21 million being introduced to the Company. Warrant
exercises have continued post year end at an accelerated rate.
Post-period end production and revenues have continued to be strong with
August to October 2022 revenues of £2.07 million.
Strategy
The Company's strategy takes account of the challenges and opportunities
presented by the UK's move to Net Zero carbon emissions by 2050. This, taken
together with the wider economic, political and operating environment which
has seen a renewed focus on indigenous energy supplies.
Our strategy has been updated to reflect these realities as follows:
1. Maintain geographical focus on the UK.
2. Focus on growth in production and revenue through conventional
production, appraisal and exploration projects.
3. Develop energy storage, hydrogen and renewable energy projects
utilising Egdon's existing assets, knowledge of the UK's onshore geology and
core technical skills and operating experience.
4. Maintain our significant portfolio of shale-gas assets.
Environment and Social Governance, Climate and Emissions
Egdon wishes to build value through developing sustainable long-term
relationships with partners and the community and is committed to the highest
standards of health, safety and environmental protection. The Company is
committed to its operations being Net Zero by 2050. These factors command
equal prominence with other business considerations. Egdon has established a
Climate Change Policy as detailed in the Corporate Governance Statement. The
Board is committed to reducing our emissions from our operations and to
monitoring and reporting performance in this area.
Oil and Gas
Egdon holds interests in 36 licences in the UK (2021: 38 licences) with
exposure to the full cycle of opportunities from exploration through to
development and production.
Production
Production during the period was 233 boepd (2021: 90 boepd), being primarily
from Wressle and Ceres as well as contributions from Keddington and Fiskerton
Airfield. This production was achieved despite Wressle only recommencing flow
on 19 August 2021 and the Ceres field being shut-in for annual maintenance for
20 days during September 2021 and for all of July 2022.
The standout asset for Egdon during the year has been Wressle (Egdon 30%)
where production has significantly exceeded our expectations following the
proppant squeeze operation. Production is currently constrained by the
Environmental Permit to between 700-725 bopd (210-218 bopd net). We have
continued to make progress on both the gas monetisation and planning for the
development of the Penistone Flags reservoir which are discussed in more
detail in the Operating Review.
The Ceres gas field (Egdon 10%) is undergoing a late-life renaissance for the
Company, contributing material revenues and cash flow. A reassessment of the
life of field economics has led to the reversal of a previous impairment of
£0.507 million during the period and we now expect production to continue
through at least to 2024.
Keddington (Egdon 45%) has continued to contribute tangible revenues during
this time of high oil prices. A viable drilling location in the east of the
field has been identified targeting up to 183,000 barrels of incremental
production and this is likely to be drilled during H2 2023.
At Fiskerton Airfield (Egdon 80%) our focus remains on maximising production
from the existing wells and managing costs. In the medium term, there is
potential for the site to be used to manage any produced water from other
Egdon sites through the existing water injection well.
Other key near-term projects identified to increase production and revenues
include Waddock Cross (Egdon 55%) and Avington (28%).
At Kirkleatham gas field (Egdon 68%) we are in advanced discussions regarding
a potential farm-out of a geophysical programme and a side-track well and
remain hopeful of concluding a deal in the near future.
The improving operational and financial outlook for our producing assets has
resulted in a reversal of a total of £1.40 million of prior impairments.
Exploration/Appraisal
Exploration/Appraisal drilling in 2023 is conditional on the outcome of the
ongoing planning appeals at Biscathorpe and North Kelsey. A planning hearing
was held for Biscathorpe on 11 October 2022 and the appeal documentation for
North Kelsey was submitted on 8 August 2022. Decisions for both appeals
could be expected around the turn of the year. Biscathorpe and North Kelsey
are volumetrically significant with each project having gross Mean Prospective
Resources of 6.5 million barrels.
Following the decision by Shell in April 2022 to withdraw from P1929 and
P2304, which hold the Resolution and Endeavour gas discoveries, Egdon quickly
put in place a plan to acquire a modified 3D survey in the first quarter of
2023 and requested an extension to the obligations on the licence. The NSTA
initially rejected this request and following further representations, has
belatedly, in October 2022, consented to Egdon's request for a twelve-month
extension to the P1929 licence obligation to acquire the 3D seismic. Should
the 3D survey not be acquired by April 2023, which is now more than highly
challenging, P1929 will determine in May 2023. An impairment of £1.80 million
has been made as a result of this expectation of both licences lapsing in the
coming period.
During the year Egdon has assumed the operatorship of PEDL343, increasing its
interest to 40% and securing an extension to the initial term of the licence
to 20 March 2024. The licence contains the Cloughton tight gas discovery,
which flowed gas from a number of different reservoirs when flow tested in
1984.
Energy storage, Hydrogen and Renewables including Geothermal
Egdon has focused on energy transition opportunities which utilise the
Company's core skills, knowledge, and operating experience.
Our initial focus has been on the geothermal potential within our existing
wells and fields. A programme to plug and abandon the existing Dukes Wood-1
oil well and recomplete it for geothermal heat production has been developed
and submitted to the NSTA. It is anticipated that subject to regulatory
approval, this work, which is a proof of concept, will now form part of a
larger programme of work and commence during 2023. Egdon is working with
Creative Geothermal Solutions Limited (CGSL) on this and other geothermal
opportunities.
In parallel, Egdon is also reviewing a number of opportunities for energy
storage, hydrogen and renewable generation and hopes to make material progress
in relation to these in the coming period. Like the rest of the Egdon
portfolio, these projects have been selected to contribute tangible additional
value to the Company.
Outlook
Production guidance for the full financial year 2022-23 is 225-245 boepd.
Operationally, our priorities for the coming year are three-fold. Firstly, a
focus on maintaining and enhancing the strong production performance at
Wressle whilst progressing both the gas monetisation and development of the
Penistone Flags. Secondly, looking to add reserves, production and revenues
through the drill-bit in Egdon's exploration and development/redevelopment
projects. Thirdly, progressing our nascent energy storage, hydrogen and
renewable generation opportunities during the coming year.
With both Wressle and Ceres contributing significant cash flow and the quality
of our near-term exploration, appraisal and development opportunities, we can
look forward with renewed confidence to the future.
As always, I would like to thank our shareholders for their continued support
and the unwavering effort of the Egdon team on behalf of all stakeholders.
Finally, I wish to announce that after seventeen years as your Chairman, I
have informed the Board of my wish to retire. A process is in train to recruit
my replacement, and this is expected to be completed during the first quarter
of 2023. It has been an immense privilege and pleasure to serve on the Board
of Egdon and I am pleased that my proposed retirement has coincided with your
Company occupying a financially strong, secure and sustainable position. With
its projects spanning the energy transition spectrum, I believe shareholders
can look forward to Egdon delivering further growth in the years to come.
Philip Stephens
Chairman
7 November 2022
OPERATING REVIEW
I am pleased to provide shareholders with a more detailed review of the
Company's assets, operations and plans with a focus on progress against
objectives, key priorities, risks, and potential growth drivers.
Health, Safety & Environment
Egdon is fully committed to high standards of Health, Safety and Environmental
("HSE") management, protection and performance with all operational activity
performed under the umbrella of the Group's HSE Management System ("HSEMS").
In line with our approach of continual improvement, the HSEMS is subject to
continuing review and revision to ensure it remains fit for purpose. During
the reporting period there was one reportable health and safety incident
(2021: Nil). This was a hand tool related injury which did not lead to any
lasting health issues.
The Company was compliant with all of its environmental permits and planning
consents.
Communications
Egdon has today released an updated website (www.egdon-resources.com) which
provides stakeholders with up-to-date information on the Company and its
operations. Egdon also has a community facing website
(www.egdon-community.com) which provides a portal for information related to
Egdon's operational sites. Summaries of press releases, non-price-sensitive
information and other relevant updates are also shared via the Company's
Twitter account (@EgdonResources).
To improve the efficiency of sharing corporate information with shareholders,
Egdon is now able to provide the option for electronic communication.
Progress against objectives
As part of our preliminary results reporting (November 2021) and Interim
Results (April 2022) we set out objectives against which I can report on
progress.
Objective Set Progress Against Objective
1) Managing our operations to ensure the continued safety of employees, · Successfully implemented COVID secure procedures and systems with
contractors and other stakeholders in response to the evolving COVID-19 no adverse direct impacts
situation
2) Continuing to carefully manage costs and cash through the current · Cost saving measures (including salary reductions) introduced
challenging operating and macro-economic environment and ensuring the business during 2021 have been reversed as business outlook has improved
is capitalised for the future
· Positive cash flow established through Wressle, Ceres and other
production significantly improving financial status of the Company
· Company continues to focus on cost-control
3) Finalising the development of the Wressle oil field for production · Production start-up achieved in January 2021
start-up in January 2021 and progressing the proppant squeeze at the Wressle
oil field to attain target production of 150 bopd net to Egdon · Proppant squeeze successfully undertaken in July 2021 with coiled
tubing completed in August 2021
· Production continues above expectation
4) Continuing to optimise oil and gas production from the Ashover Grit · Facilities upgraded on site including new gas incineration unit
reservoir at Wressle, building on the strong performance to date
· Production constrained by Environmental Permit limits on gas
incineration
· No water produced to date
5) Progressing gas monetisation at Wressle · Site micro-turbine to be installed for site power
· Up to 1.75 MW of electricity export to private local grid to be
progressed
6) Finalising plans for development of the material Contingent · Reservoir modelling completed and outline development defined
Resources in the Penistone Flags at Wressle including well types
· Final well locations to be defined on reprocessed 3D seismic volume
before commencing planning application process
7) Securing planning consent via appeal for the Biscathorpe and North · Planning Appeal for Biscathorpe submitted in April 2022 and a
Kelsey projects Planning Hearing was held on 11 October 2022. Outcome awaited
· Planning Appeal for North Kelsey submitted in August 2022. Outcome
awaited
8) Progressing a farm-out of North Kelsey-1 and Biscathorpe-2Z with a · On hold pending planning appeal outcomes
view to drilling during 2022
9) Streamlining the conventional resource portfolio to concentrate on · Non-core and low prospectivity assets relinquished or licences
a smaller number of key assets whilst maintaining our position in core lapsed
unconventional resource assets
· Ongoing review of all assets
10) Progressing the acquisition of the 3D seismic survey over the · During April 2022, Shell advised Egdon of its intention to withdraw
Resolution and Endeavour gas discoveries in February 2022 from licences P1929 and P2304
· Egdon was advised in October 2022 that the NSTA had consented to
Egdon's request for a twelve-month extension to the P1929 licence obligation
to acquire the 3D seismic. Egdon will now engage with the NSTA to confirm the
detailed expectation in relation to this and subsequent timelines. Should
the 3D survey not be acquired by April 2023, P1929 will determine in May
2023. Licence P2304 will be relinquished
11) Subject to lifting of the current moratorium on hydraulic fracturing · Moratorium lifted in September 2022 and then reinstated in October
operations for shale-gas, progressing the planning and permitting for the 2022
drilling and subsequent testing of the Springs Road-2 well
12) Further developing the Company's energy transition opportunities · A programme to recomplete Dukes Wood-1 for geothermal heat
including repurposing of the Dukes Wood-1 well for geothermal heat production has been developed and submitted to the NSTA
· Planned activity in 2023 as part of wider programme of works
13) Progressing drilling plans to target incremental oil production / near · Reprocessing of the Keddington 3D survey undertaken and ahead of
field exploration opportunities at the Keddington oil field and field finalising well target
redevelopment at Waddock Cross
· Progress made with extending site lease and submission of revised
Field Development Plan for Waddock Cross
Assets & Operations
Egdon held interests in 36 licences in the UK at year end (2021: 38) with
exposure to the full cycle of opportunities from exploration through to
development and production.
Licensing
Highlighted below are key changes to our licence portfolio during and
post-period.
Licence Changes
PEDL343 Licence extended to 20 March 2024, Egdon assumed operatorship and increased
equity interest to 40%
PEDL209 Egdon is in the process of increasing its interest to 100% due to withdrawal
of other JV parties
PEDL202 Interest in licence relinquished during August 2021
PEDL130 Interest on licence relinquished during July 2022
P1929 To determine in May 2023 if 3D seismic cannot be acquired by April 2023
subject to NSTA discussions
P2304 To be relinquished in Q4 2022
Production and Development Assets
Production during the period was 233 boepd, (2021: 90 boepd) from Wressle,
Ceres, Keddington and Fiskerton Airfield.
Wressle (PEDL180/182: Egdon 30% interest)
The Wressle Field has been independently audited (2016 Competent Person's
Report ("CPR" ERCE) with gross 2P Reserves of 0.62 million barrels of oil
("mmbo") and 2C Resources of 1.53 mmbo.
A proppant squeeze operation on the Ashover Grit reservoir was successfully
completed in late July 2021 and the well resumed production on the 19 August
2021. Oil production has significantly exceeded Egdon's expectation. Since
production commenced at Wressle-1 in January 2021, the cumulative gross
production through to 31 July 2022 has exceeded 225,000 barrels of oil with no
formation water produced to date.
Environmental monitoring throughout the proppant squeeze and subsequent
production operations has shown no measurable impact on water quality, no
associated seismicity and that noise levels have been within the permitted
levels.
Over the last twelve months a series of improvements and upgrades to the
Wressle site production facilities have been successfully undertaken. The
implementation of a two-stage gas utilisation scheme is currently being
progressed, which will enable the oil production limit to be lifted. For the
first stage, we intend to utilise the Ashover Grit gas for electricity
generation and export, for which planning is already in place. This will be
undertaken in two steps. Initially we will replace the site diesel generator
with a gas micro-turbine for site electrical power, and secondly, we will
install a separate gas engine to generate and export up to 1.75 MW of
electricity into a local private power network.
We expect installation of the microturbine to be completed by year end. In
parallel we are expediting the sourcing of a gas engine and equipment for step
two and will update on timing once confirmed. The additional revenue from
monetisation of the Ashover Grit gas, together with increased oil production
rates will have a positive impact on the value of the Wressle field
development.
Stage two of the gas monetisation will focus on gas export from the Penistone
Flags reservoir.
We are finalising the reprocessing of the Wressle 3D seismic data and
interpretation of this will inform the final location of new development wells
that will target the Penistone Flags (Gross 1.53 mmbo plus 2 billion cubic
feet 2C Resources (CPR, 2016)). Drilling of the Penistone Flags will be
progressed at the earliest opportunity, subject to receipt of regulatory and
planning consents as we look to build on the successes that have been achieved
to date. In addition to the Penistone Flags, any new well will also appraise
other reservoirs that were proven hydrocarbon bearing in the Wressle-1
discovery well.
A new CPR will be commissioned to provide updated reserve and resource volumes
for the Wressle field.
Ceres (P1241: Egdon 10%)
Ceres gas production during the period has declined to 38 boepd plus 2 boepd
of condensate net to Egdon (2021: 58 boepd plus 4 boepd of condensate). The
recent strong gas prices make the asset highly economic, and production is now
expected to continue through to at least 2024 with abandonment to follow.
Keddington (PEDL005R: Egdon 45%)
Keddington continues to produce at a net rate to Egdon of 15 bopd (2021: 8
bopd) from one well. A technical review of the Keddington field and the
surrounding licence area was completed towards the end 2021. The results of
this work confirmed that there remains an undrained oil resource located on
the eastern side of the Keddington field. Planning consent for further
drilling is already in place, and this presents an opportunity to increase
production via a development side-track from one of the existing wells. To
facilitate confirmation of the target definition and well design planning,
Egdon has completed the re-processing of its legacy 3D seismic data. Modelling
indicates that a horizontal side-track has the potential to increase the
Keddington oil production from between 113,000 barrels and 183,000 barrels.
Subject to finalising the sub-surface location, it is planned to drill the
well during 2023.
In addition, a near-field exploration opportunity exists at Keddington South,
which has a gross Mean Prospective Resource Volume of 635,000 barrels of oil
and at the Louth Prospect, with a gross Mean Prospective Resource of 600,000
barrels of oil. It is intended that the Louth prospect would now be accessed
from the existing Keddington site.
Fiskerton Airfield (EXL294: Egdon 80%)
Fiskerton Airfield is currently shut-in whilst it awaits a workover programme
to reinstate production. Our focus at Fiskerton Airfield remains on maximising
production from the existing wells and managing costs. Longer term potential
for the site is to use it to manage produced water from other sites through
the existing water injection well on site and also for potential geothermal
repurposing.
Waddock Cross (PL090: Egdon 55%)
Waddock Cross is currently shut-in. Independent 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) this asset has been high graded by the
Company as planning consent and facilities are in place to test this
significant opportunity.
Kirkleatham (PEDL068: Egdon 68%)
The Kirkleatham gas field remains shut in. Potential exists for a side-track
to access a volume of gas in the attic of the structure. Furthermore,
additional upside may exist for a tight gas resource in the underlying
Carboniferous. The Company is engaged with a Third Party who has expressed an
interest in farming into PEDL068 by undertaking a small geophysical work
programme and the drilling of a side-track up dip of the Kirkleatham-4 well.
Egdon would be carried through these operations.
Avington (PEDL070: Egdon 28%)
The Avington field remains shut-in. In December 2021, the field operator was
advised that planning consent had been awarded on appeal. The forward plan is
to undertake a phased scope of works to redevelop the field which includes
establishing on site water handling facilities.
Conventional Exploration and Appraisal Assets
The Company continues to progress those conventional resource opportunities
that offer maximum impact via the drill-bit.
Key projects are:
Biscathorpe (PEDL253: Egdon 35.8%)
Evaluation of the results of the Biscathorpe-2 well, together with the
reprocessing of 264 square kilometres of 3D seismic data identified a possible
material and commercially viable hydrocarbon resource remaining to be
appraised. The planned side-track would target the Dinantian Carbonate, where
a 68-metre oil column was discovered in Biscathorpe-2. The Dinantian Carbonate
has been assessed by Egdon to have a gross Mean Prospective Resource volume of
2.55 mmbo. The overlying Basal Westphalian Sandstone has the potential to add
gross Mean Prospective Resources of 3.95 mmbo. Commercial screening conducted
by Egdon indicates break-even full cycle economics to be US$18.07 per barrel.
In November 2021, Egdon's planning application to undertake side-track
drilling, well testing and long-term oil production was rejected by
Lincolnshire County Council (LCC). In April 2022, Egdon submitted an appeal
against LCC's decision which was heard by the Planning Inspectorate on the 11
October. We would expect to hear the outcome of the Appeal around the turn of
the year.
North Kelsey (PEDL241: Egdon 50%)
The North Kelsey Prospect has been mapped from 3D seismic data and has
potential for oil in up to four stacked conventional Carboniferous reservoir
targets: the Chatsworth Grit, Beacon Hill Flags, Raventhorpe Sandstone and
Santon Sandstone. North Kelsey is geologically analogous to the Wressle
field. Egdon has calculated the gross Prospective Resources to range from
4.66 mmbo up to 8.47 mmbo, with a Mean Resource volume of 6.47 mmbo.
Egdon's application to extend the planning consent to drill the North Kelsey
prospect was rejected by LCC in April 2022. In August of this year, Egdon
submitted an appeal to the Planning Inspectorate with a decision expected
early in 2023.
Resolution and Endeavour (P1929 & P2304: Egdon 30%)
In April of 2022, licence operator Shell advised Egdon and the NSTA that it
had decided to withdraw from P1929 and P2304, which cover the Resolution and
Endeavour gas discoveries. Shell's technical assessment of the Resolution
discovery concluded that it has Gross Mean Contingent Gas Resource volume is
in excess of 500 bcf; this is 250 bcf more than the Resolution CPR (2019).
Given its considerable size, Resolution has the potential to make a material
contribution to the UK's future gas supply. Egdon submitted a request to the
NSTA that the licence obligations be extended and responsibility for the
commitment work programme over P1929 be transferred from Shell. Unfortunately,
the NSTA initially rejected this request, but following further
representations has belatedly in October 2022, consented to Egdon's request
for a twelve-month extension to the P1929 licence obligation to acquire the 3D
seismic. Should the 3D survey not be acquired by April 2023, which is now more
than highly challenging, P1929 will determine in May 2023. An impairment of
£1.80 million has been made as a result of the expectation of both licences
lapsing in the coming period.
Cloughton (PEDL343: Egdon 40%)
Egdon has assumed the operatorship of PEDL343 from Third Energy and has also
increased its equity in the Licence to 40%. We have agreed a Retained Area
Work Programme with the NSTA that includes an assessment of the conventional
and unconventional resource potential. Work is underway to model the risks
attached to induced seismicity across the licence area. Cloughton-1, a
discovery drilled in 1984 confirmed the presence of gas in a number of low
porosity Carboniferous aged sandstone reservoirs.
Shale-gas
The Group's unconventional resources acreage position in Northern England is
151,742 net acres (614km2 net) (2020: 164,280 net acres (664km² net)). This
remains a significant and potentially highly valuable position with estimated
Mean volumes of undiscovered GIIP of 37.6 TCF net to Egdon, independently
assessed by ERCE (2019: 47.6 TCF).
Egdon's core area is the Gainsborough Trough of Nottinghamshire, Lincolnshire
and Yorkshire where the Group holds interests in 71,361 net acres (2021:
71,361 net acres).
The results from the 2019 Springs Road-1 well ("SR-01" - Egdon 14.5%), compare
favourably with some of the best US commercial shale-gas operations and
highlight a potentially world class resource in the Gainsborough Shale.
Activity remains paused following the chaotic lifting and then reintroduction
of the moratorium on hydraulic fracturing for shale-gas.
Egdon also retains interests in the Widmerpool Basin and Humber Basins of the
East Midlands, the Cleveland Basin of NE England and the Blacon Basin of NW
England.
Energy Transition Opportunities
The energy transition will present a number of challenges and opportunities
for Egdon. The Company recognises the potential for repurposing of its fields,
sites and wells for renewable purposes as well as with additional new
stand-alone projects in geothermal, hydrogen, energy storage and renewables.
Egdon is also reviewing and progressing a number of opportunities for energy
storage, hydrogen and renewable generation and hopes to make material progress
in relation to these in the coming period.
Dukes Wood Geothermal
Egdon's initial focus has been on geothermal opportunities within our existing
well stock. A detailed review has highlighted an anomalously high geothermal
gradient local to our shut-in wells at the Dukes Wood and Kirklington oil
fields.
Working with Creative Geothermal Solutions Limited (CGSL) we have developed
and submitted to the regulators (NSTA and HSE) a programme of works to plug
and abandon the existing Dukes Wood-1 oil well and recomplete it for a test
programme measuring its geothermal heat production. It is anticipated that
work on this proof of concept project will commence during 2023 as part of a
wider programme of well interventions.
Outlook and Priorities
Initial production guidance for the 2022/2023 financial year is 225-245 boepd
from Wressle, Ceres, Keddington and Fiskerton Airfield.
The key operational priorities for the Company during the coming year are:
· Maintaining and enhancing the strong production performance at
Wressle whilst progressing both the gas monetisation and Penistone Flags
development
· Add reserves, production and revenues through the drill-bit in
both our exploration and development/re-development projects
· Progress energy storage, hydrogen and renewable generation
projects.
Mark Abbott
Managing Director
7 November 2022
EGDON RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2022
2022 2021
Notes £ £
Continuing operations
Revenue - continuing 6,907,865 1,092,735
Cost of sales - exploration costs written-off and pre-licence costs (151,490) (206,156)
Cost of sales - impairments of intangible fixed assets 2 (1,801,790) (276,362)
Cost of sales - impairments of property, plant and equipment 3 1,396,903 -
Cost of sales - depreciation (1,521,170) (183,711)
Cost of sales - direct production costs (1,257,226) (918,689)
Cost of sales - other, including shut-in fields (205,034) (190,573)
Total cost of sales (3,539,807) (1,775,491)
Gross profit/(loss) 3,368,058 (682,756)
Administrative expenses (914,681) (862,060)
Other operating income 142,926 156,616
2,596,303 (1,388,200)
Finance income 46,369 50,616
Finance costs (235,729) (344,051)
Profit/(loss) before taxation 2,406,943 (1,681,635)
Taxation 890,667 -
Profit/(loss) for the year 3,297,610 (1,681,635)
Other comprehensive income for the year - -
Total comprehensive income/(loss) for the year attributable to equity holders 3,297,610 (1,681,635)
of the parent
Basic earnings/(loss) per share 4 0.64p (0.51)p
Diluted earnings/(loss) per share 4 0.57p (0.51)p
EGDON RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2022
Notes 2022 2021
£ £
Non-current assets
Intangible assets 19,562,165 21,241,378
Property, plant and equipment 9,823,494 8,719,310
Right-of-use asset 487,736 617,808
Trade and other receivables 661,274 384,831
Total non-current assets 30,534,669 30,963,327
Current assets
Inventory 17,019 -
Trade and other receivables 2,685,043 1,084,992
Cash and cash equivalents 4,800,472 1,959,728
Total current assets 7,502,534 3,044,720
Current liabilities
Trade and other payables (2,493,573) (1,772,284)
Other financial liabilities (112,292) (1,135,804)
Net current assets 4,896,669 136,632
Total assets less current liabilities 35,431,338 31,099,959
Non-current liabilities
Lease liabilities (900,261) (1,012,553)
Provisions (3,459,142) (2,669,107)
Net assets 31,071,935 27,418,299
Equity
Share capital 17,203,299 17,118,649
Share premium 27,640,047 27,513,071
Share based payment reserve 144,400 122,254
Retained earnings (13,915,811) (17,335,675)
31,071,935 27,418,299
EGDON RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2022
2022 2021
£ £
Cash flows from operating activities
Profit/(loss) before tax 2,406,943 (1,681,635)
Adjustments for:
Depreciation and impairments of non-current assets 1,948,770 594,131
Increase in decommissioning provision - written off to cost of sales 49,125 28,908
Foreign exchange (gains)/loss (217,665) 4,525
(Increase)/decrease in inventory (17,019) 5,466
(Increase)/decrease in trade and other receivables (832,295) 696,675
Increase/(decrease) in trade and other payables 563,507 (1,057,412)
Finance costs 235,729 344,051
Finance income (46,369) (50,616)
Share based payment expense 144,400 -
Net cash flow generated from/(used in) operating activities 4,235,126 (1,115,907)
Cash flows from investing activities
Payments for exploration and evaluation assets (216,061) (384,827)
Purchase of property, plant and equipment (349,460) (719,288)
Sale of property, plant and equipment - 209,872
Redemption of redeemable preference shares - 50,000
Net cash used in capital expenditure and investing activities (565,521) (844,243)
Cash flows from financing activities
Issue of convertible loan notes - 1,051,035
Costs associated with issue of convertible loan notes - (67,236)
Issue of shares 211,626 1,440,350
Costs associated with issue of shares - (78,203)
Redemption of redeemable preference shares - (50,000)
Principal paid on lease liabilities (102,946) (77,071)
Interest paid on lease liabilities (59,745) (74,748)
Interest paid (11) -
Interest received 52 -
Loan (repayment)/drawdown (1,000,000) 1,000,000
Interest paid on loan (100,420) (66,948)
Net cash flow (used in)/generated from financing (1,051,444) 3,077,179
Net increase in cash and cash equivalents 2,618,161 1,117,029
Cash and cash equivalents at beginning of year 1,959,728 847,224
Effects of exchange rate changes on the balance of cash held in foreign 217,665 (4,525)
currencies
Cash and cash equivalents at end of year 4,795,554 1,959,728
Cash and cash equivalents comprise:
Cash at bank and in hand 4,800,472 1,959,728
Bank overdrafts (4,918) -
Cash and cash equivalents at end of year 4,795,554 1,959,728
In 2022 significant non-cash transactions included the recognition of the NPI
provision of £608,000 which is included in other provisions, the share based
payment charge of £144,400 and the recognition of the deferred tax asset of
£1,043,531.
In 2021 significant non-cash transactions included the recognition of the
decommissioning provision of £80,000 and the convertible loan which was
subsequently converted to equity.
EGDON RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2022
Group Share based Convertible
Share Share payment debt option Retained Total
capital premium reserve reserve earnings equity
£ £ £ £ £ £
Balance at 1 August 2020 15,234,035 26,967,656 122,254 - (15,654,040) 26,669,905
Loss for the year - - - - (1,681,635) (1,681,635)
Total comprehensive income/(loss) for the year - - - - (1,681,635) (1,681,635)
Issue of shares 1,152,280 288,070 - - - 1,440,350
Share issue costs - (78,203) - - - (78,203)
Issue of convertible loan notes - - - 28,406 - 28,406
Issue costs of convertible loan notes - - - (1,817) - (1,817)
Transfer on conversion of loan notes to equity - debt element 732,334 374,378 - - - 1,106,712
Issue costs of convertible loan notes - (65,419) - - - (65,419)
Transfer on conversion of loan notes to equity - equity element - 26,589 - (26,589) - -
Balance at 31 July 2021 17,118,649 27,513,071 122,254 - (17,335,675) 27,418,299
Profit for the year - - - - 3,297,610 3,297,610
Total comprehensive income/(loss) for the year - - - - 3,297,610 3,297,610
Issue of shares - exercise of warrants 84,650 126,976 - - - 211,626
Cancellation of share options - - (122,254) - 122,254 -
Issue of new share options - - 144,400 - - 144,400
Balance at 31 July 2022 17,203,299 27,640,047 144,400 - (13,915,811) 31,071,935
EGDON RESOURCES PLC
Notes to the Financial Statements
FOR THE YEAR ENDED 31 JULY 2022
1. Basis of Accounting and Presentation of Financial Information
The financial information set out in this announcement does not constitute the
statutory accounts of the Group for the years ended 31 July 2022 or 31 July
2021. The financial information has been extracted from the statutory accounts
of the Group for the years ended 31 July 2022 and 31 July 2021.
The auditor, CLA Evelyn Partners Limited, has reported on the statutory
accounts for the year ended 31 July 2022 and 2021; the audit reports were
unqualified and did not contain statements under either section 498(2) or
498(3) of the Companies Act 2006. However, in their report on the statutory
accounts for the year ended 31 July 2022 and 31 July 2021, the auditor drew
attention, by means of an emphasis of matter, to the potential effect on the
carrying value of unconventional assets of the Government moratorium on
hydraulic fracturing.
The statutory accounts for the year ended 31 July 2021 have been delivered to
the Registrar of Companies; those for the year ended 31 July 2022 were
approved by the Board on 7 November 2022 and will be delivered to the
Registrar of Companies following the Annual General Meeting. The Annual Report
for the year ended 31 July 2022, including the auditor's report, will be
posted to shareholders who have requested a hard copy during the week
commencing 14 November 2022 and will be available to be downloaded from the
Company's website at www.egdon-resources.com for shareholders who have
accepted electronic communications from the same date. Hard copies can be
requested from Egdon Resources plc, Blackstable House, Longridge, Sheepscombe,
Stroud, Gloucestershire, GL6 7QX. This preliminary announcement was approved
by the Board on 7November 2022.
Basis of preparation and statement of compliance with IFRS
The Group's and Company's financial statements have been prepared in
accordance with UK-adopted International Accounting Standards and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
IFRS comprises the Standards issued by the International Accounting Standards
Board (IASB) and Interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC) in conformity with the
requirements of the Companies Act 2006.
Going concern
The Directors have prepared the financial statements on the going concern
basis, which assumes that the Group and the Company will continue in
operational existence without significant curtailment of its activities for
the foreseeable future.
2021-22 has seen beneficial operating and macro-economic conditions for the
oil and gas industry and the Group has seen a resultant improvement in trading
and cash-flow coming from Wressle and increased profitability from Ceres.
Forward cash flows necessarily include assumptions as to the timing and value
of production from the Group's assets. Whilst there is currently no evidence
that the timing or value of these revenues is unrealistic, the Directors
acknowledge that disruptions to production, along with changes in both oil and
gas prices give some level of uncertainty in respect of the timing of future
cash flows. The Directors have undertaken stress testing of the forward
commodity price assumptions with particular focus on oil and gas price and
determined that these assumptions remain valid notwithstanding a possible
reduction in forecast 2023 realised oil price by 10% and gas price by 46%
without impacting planned expenditure. The Group also has flexibility in
relation to the timing and quantum of future expenditures, with 75% of these
being discretionary, and by deferring certain costs the forecast remains valid
under circumstances where a material fall in commodity prices is experienced.
In addition, although not assumed in the going concern forecasts, the Group
also has options to access additional sources of funding if required via
farm-out, sales, new lending or the issue of new equity.
After preparing cash flow forecasts and considering the results of stress
tests to certain assumptions, and having made enquiries, the Directors have a
reasonable expectation that the Group and the Company will have access to
adequate resources to continue in operational existence for the foreseeable
future and have prepared the financial statements on that basis.
Impact of new international reporting standards, amendments and
interpretations
New standards, interpretations and amendments
New standards impacting the Group that have been adopted in the financial
statements for the year ended 31 July 2022, but have not had a significant
effect on the Group are as follows:
· Interest Rate Benchmark Reform - IBOR 'phase 2 (Amendments to
IFRS 9, IAS 39 and IFRS 7); and
· Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendments
to IFRS 16).
EGDON RESOURCES PLC
Notes to the Financial Statements (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
Impact of new international reporting standards, amendments and
interpretations (continued)
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early. The following
amendments are effective for the period beginning 1 August 2022, but will not
have a significant effect on the Group are as follows:
· Onerous Contracts - Cost of Fulfilling a Contract (Amendments to
IAS 37);
· Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16);
· Annual Improvements to IFRS Standards 2018-2020 (Amendments to
IFRS 1, IFRS 9, IFRS 16 and IAS 41);
· References to Conceptual Framework (Amendments to IFRS 3); and
· Insurance Contracts (Amendments to IFRS 17).
The following amendments are effective for the period beginning 1 August 2023,
but will not have a significant effect on the Group are as follows:
· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2);
· Definition of Accounting Estimates (Amendments to IAS 8); and
· Deferred Tax Related Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12).
2. Impairments - Exploration and evaluation costs
Current year
The Directors considered the potential impact of the moratorium on hydraulic
fracturing for shale-gas on the Group's unconventional asset portfolio,
including the core area of the Gainsborough Trough. No impairments were
considered necessary as a consequence of the moratorium in 2022.
The Directors remain of the view that it would be possible to demonstrate that
hydraulic fracturing can be undertaken in a safe and environmentally
responsible manner. As at 31 July 2022, the book value of the Group's
unconventional assets was £16.3 million (2021: £16.3 million).
During April 2022, Shell advised Egdon of its intention to withdraw from
licences P1929 and P2304, containing the Resolution and Endeavour gas
discoveries. Egdon applied to the NSTA for an extension of time to complete
the 3D seismic programme. The NSTA initially rejected this request during
August 2022 and following further representations has belatedly in October
2022, consented to Egdon's request for a twelve-month extension to the P1929
licence obligation to acquire the 3D seismic. Should the 3D survey not be
acquired by April 2023, which is now more than highly challenging, P1929 will
determine in May 2023. We have decided to fully impair these assets at this
time resulting in a total impairment charge of £1,801,790.
During the year £0.25 million of data associated with the P1929 and P2304
licences was transferred to licence PEDL334 (Cloughton) where it remains of
critical use in evaluating that licence.
Prior year
An impairment charge of £276,362 was recognised in relation to licences PL161
and PL162. The impairment arose as these licences were no longer deemed to
have value following the lapse of the related farm-out.
Exploration write offs totalling £112,554 were recognised in relation to
licences PEDL339, PEDL258, PEDL259 and PEDL202. These licences were
relinquished during the year.
During the year the Company recognised disposals of £109,872 and £100,000 in
relation to the farm out of licence interests. The disposal of £109,872 was
recognised following the farm out agreement with Shell U.K. Limited for 70% of
the UK offshore licence interest held on P1929 and P2304 which contain the
Resolution and Endeavour as discoveries respectively. The disposal of
£100,000 related to the agreement to align the equity interest in PEDL241 on
a 50:50 basis between the Company and its partner Union Jack Oil plc.
EGDON RESOURCES PLC
Notes to the Financial Statements (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
3. Impairments - Property, Plant and Equipment
Current year
An impairment credit of £506,903 has been recognised in relation to the Ceres
Gas Field as the current high gas price assumptions render Ceres economic
until 2025. Based on the impairment review, the pre-tax value in use of the
Ceres Gas Field as at 31 July 2022 is £4.72 million.
An impairment credit of £127,000 has been recognised in relation to the
Keddington Oil Field as it is assumed that there will be production in late
2023. Based on the impairment review, the pre-tax value in use of the
Keddington Oil Field as at 31 July 2022 is £2.39 million.
An impairment credit of £133,000 has been recognised in relation to Avington
Oil Field as restoration of production is anticipated during 2023. Based on
the impairment review, the pre-tax value in use of the Avington Oil Field as
at 31 July 2022 is £2.36 million.
An impairment credit of £300,000 has been recognised in relation to Waddock
Cross Oil Field as production will be reinstated in 2023. Based on the
impairment review, the pre-tax value in use of the Waddock Cross Oil Field as
at 31 July 2022 is £19.67 million.
An impairment credit of £330,000 has been recognised in relation to
Kirkleatham Gas Field as drilling is expected in late 2023. Based on the
impairment review, the pre-tax value in use of the Kirkleatham Gas Field as at
31 July 2022 is £3.27 million.
Prior year
No impairment charges were recognised in the prior year.
4. Earnings/(loss) per share
Basic earnings/(loss) per share
2022 2021
£ £
Profit/(loss) for the financial year 3,297,610 (1,681,635)
Basic weighted average Ordinary shares in issue during the year 518,951,908 331,615,357
Pence Pence
Basic earnings/(loss) per share (0.51)
0.64
Diluted earnings/(loss) per share
2022 2021
£ £
Profit/(loss) for the financial year 3,297,610 (1,681,635)
Diluted weighted average Ordinary shares in issue during the year 581,343,086 331,615,357
Pence Pence
Diluted earnings/(loss) per share (0.51)
0.57
The share options were not dilutive in 2021 as a loss was incurred.
5. Share Capital
In the current year a total of 8,465,000 warrants to subscribe for new
Ordinary 1p shares were exercised for total cash consideration of £211,626 at
an issue price of 2.5p. The nominal value of the shares was £84,650 and the
additional share premium created was £126,976.
In the prior year, on 20 July 2021, following an open offer, the Company
issued 115,228,000 new Ordinary 1p shares for total cash consideration of
£1,440,350. The nominal value of the shares was £1,152,280 and the
additional share premium created totalled £288,070. In addition, each
subscription share was granted a right to subscribe for 0.5 of a new Ordinary
Share at a price of 2.5p per share, exercisable at any time until the date of
the second anniversary of their issue.
In the prior year, on 20 July 2021, the convertible loan notes were converted
to 73,233,406 new Ordinary 1p shares at an issue price of 1.55p. The nominal
value of the shares was £732,334 and the additional share premium created was
£402,784 with issue costs of £67,236.
EGDON RESOURCES PLC
Notes to the Financial Statements (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
5. Share Capital (continued)
In the prior year, on 28 July 2021, Infrastrata plc fully paid the previously
part-paid £1 Redeemable Preference Shares held by it in Egdon Resources plc.
These shares were then redeemed. On the same day Egdon Resources U.K. Limited
fully paid the previously part-paid £1 Redeemable Preference Shares held by
it in Infrastrata plc. These shares were then redeemed. As a result these
reciprocal cross-holdings, which date from the division of the original
company in 2007, have been eliminated at no net cost to the Group.
6. Subsequent Events
On 8 August 2022 the North Kelsey Planning appeal documentation was submitted.
On 8 September 2022 the Government announced the lifting of the moratorium on
hydraulic fracturing for shale-gas.
Egdon was advised in October 2022 that the NSTA had consented to Egdon's
request for a twelve-month extension to the P1929 licence obligation to
acquire the 3D seismic. Egdon will now engage with the NSTA to confirm the
detailed expectation in relation to this and subsequent timelines. Should
the 3D survey not be acquired by April 2023, P1929 will determine in May
2023. Licence P2304 will be relinquished.
A hearing was held on 11 October 2022 in relation to the Biscathorpe planning
appeal and we now await the Planning Inspector's decision.
On 27 October 2022 the incoming Government announced the re-imposition of the
moratorium on hydraulic fracturing for shale-gas.
7. 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 11.30 hours on Tuesday
13 December 2022. Further details of the arrangements for the meeting will
be contained in the Notice of the AGM and Chairman's Letter which will be
available in due course.
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