REG - Egdon Resources PLC - Update on PL081 & PEDL347

Egdon ResourcesAnnouncement

07/08/2023 08:00

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RNS Number : 4028I  Egdon Resources PLC  07 August 2023

embargoed for release at 0800

7 August 2023

 

EGDON RESOURCES PLC

("Egdon" or "the Company")

Exercise of farmout option PL081 and agreement relating to PEDL347

Egdon Resources plc (AIM:EDR), the UK Energy Company, is pleased to advise
that it has exercised the option to farm-in to onshore Production Licence
PL081 under the terms of the Farmout Option Agreement with York Energy (UK)
Holdings Limited ("York") as previously announced on 6 February 2023.  In
addition, Egdon and York have signed a Letter Agreement with Cuadrilla North
Cleveland Limited ("Cuadrilla") the 100% licensee of PEDL347, which would
result in a farm-in and equalisation of interests between the two licences
(The "FEQ Agreement").

The PL081 and PEDL347 licences contain the Weaverthorpe Prospect
("Weaverthorpe") which is a shallow (c. 1000 metres) Sherwood Sandstone
(Triassic) conventional prospect located immediately up-dip of interpreted gas
pay in the Fordon-2 well (drilled by BP in 1974). During the six-month option
period with York, Egdon has completed the reprocessing and interpretation of
214 kilometres of 2D seismic data and further technical and operational
studies which have de-risked the opportunity and confirmed a material,
commercially viable prospect.

Under the terms of the FEQ Agreement Egdon, York and Cuadrilla (the "Parties")
shall procure that legal and beneficial interests in both PL081 and PEDL347
(the "Licences") are assigned between them so that both licences are held
Egdon 52.5%, Cuadrilla 25% and York 22.5%.  Egdon would be appointed as the
operator of the Licences. Following recovery of Egdon's costs of the farm-in
it will assign a further 2.5% interest in both the Licences to York.

The Parties have agreed to use their best endeavours to conclude the FEQ
Agreement within six weeks, and to negotiate and agree a Joint Operating
Agreement covering the Licences within a further six weeks.

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 optimally test the Weaverthorpe Prospect
within the Licences (the "Work Programme").  Egdon will have a period of
three years to complete the Work Programme.

Under the terms of the original Farmout Option Agreement Egdon undertook and
paid for the work during the Option Period, is liable to pay 100% of any 2023
licence fees for PL081 and will pay York a cash sum of £100,000, less any
licence fees that are due or have been paid for 2023.

Egdon will pay the regulatory and reasonable legal costs associated with the
transfer of the Licence interests and operatorship.

The assignment of the Licence interests to Egdon, York and Cuadrilla and the
transfer of operatorship to Egdon will be subject to the usual NSTA approvals.

 

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

"Our technical, commercial and operational due diligence has confirmed our
previous view that Weaverthorpe is a robust and commercially attractive
conventional gas prospect, spanning the PL081 and PEDL347 Licences.

This has triggered the exercise of the Option on PL081 and an agreement with
Cuadrilla in respect of PEDL347, which when concluded, will cover the entire
prospect area and allow the optimal appraisal and development of Weaverthorpe
on behalf of the new Joint Venture.

Indigenous gas resource like Weaverthorpe provide local employment and
generate taxes whilst having compelling environmental and security of supply
benefits by reducing the UK's increasing reliance on imports of LNG which
carry significantly higher pre-combustion emissions.  Producing gas from
Weaverthorpe would be fully aligned with the Government's Energy Security
Strategy and Net Zero targets.

We look forward to working with York, Cuadrilla and our wider stakeholders on
delivering the planned work programme over the coming period."

For further information please contact:

Egdon Resources plc

Mark Abbott, Martin
Durham
01256 702 292

 

Buchanan

Ben Romney, Barry
Archer
020 7466 5000

 

Nominated Adviser & Joint Broker - WH Ireland
Limited

Antonio Bossi, Chris Hardie, James
Bavister
020 7220 1666

 

Joint Broker & Financial Advisors - VSA Capital Limited

Andrew Monk, Andrew
Raca
020 3005 5000

 

 

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.

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.

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 33 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.

 

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