TIDMEDR
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 GBP100,000, 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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END
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