Egdon Resources PLC PEDL209 exch of interests; new opt-in agreement (4441B)

TIDMEDR

RNS Number : 4441B

Egdon Resources PLC

04 April 2017

For immediate release

4 April 2017

EGDON RESOURCES PLC

("Egdon" or "the Company")

PEDL209 Acquisition and New Opt-In Agreement with Total

Egdon Resources plc (AIM:EDR) is pleased to announce that it has acquired from Stelinmatvic Industries Limited ("Stelinmatvic") its 12% interest in the unconventional resources exploration rights in UK Onshore licence PEDL209 located in one of the Company's core areas, the Gainsborough Trough. As part of the consideration for this acquisition, Egdon has transferred 12% out of its interest in the remaining conventional prospects on the PEDL209 licence to Stelinmatvic.

As further consideration, Egdon has today issued 580,646 Ordinary Shares in the Company ("the Consideration Shares") to Stelinmatvic, fully paid. The value of the Consideration Shares is equivalent to GBP54,000 based on the average closing mid-price for the five days prior to the day of completion. The Consideration Shares represent 0.22% of the enlarged share capital of the Company. Application has been made for admission of the Consideration Shares to trading on AIM, which is expected to become effective on 7 April 2017. Following admission the Company will have 259,984,822 shares in issue.

Concurrent with this transaction, Egdon has entered into a new Opt-In Agreement with Total E&P UK Limited ("Total"), a wholly owned subsidiary of Total SA. Under the terms of the agreement, Total has an option to farm-in to unconventional resources exploration in PEDL209, exercisable until 31 December 2018 and to earn a 36% interest in the licence by paying Egdon's remaining 36% (together with Total's own 36% interest) of an exploration programme of up to a gross GBP13.47 million which would include seismic acquisition and the drilling of a well.

This agreement with Total supersedes the previous agreement announced on 30 January 2014. The transaction with Stelinmatvic has already completed and the interests in PEDL209 are now:

 
                            Conventional      Unconventional 
                                                     Post option 
                                           Current     exercise 
=========================  =============  ========  ============ 
 Egdon Resources 
  U.K. Limited                       35%       72%           36% 
 Blackland Park 
  Exploration Limited                28%       28%           28% 
 Stelinmatvic Industries             27%         -             - 
  Limited 
 Union Jack Oil                      10%         -             - 
  plc 
 Total E&P UK Limited                  -         -           36% 
-------------------------  -------------  --------  ------------ 
 

The acquisition adds a total of 1,898 net acres to Egdon's unconventional resources exploration acreage holdings, or 949 net acres post option exercise.

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

"We are pleased to increase our interest in the unconventional resources prospectivity of PEDL209 and secure a new opt-in agreement with Total, which would fully carry our increased interest in the licence if exercised.

Following the approval by Nottinghamshire County Council last November of IGas operated drilling at Springs Road in the neighbouring licence of PEDL140, we look forward to being carried on potentially play-opening wells in the Gainsborough Trough, our core area for unconventional resources exploration.

We continue to believe that indigenous onshore gas could be a major contributor to the UK's future energy mix."

For further information please contact:

Egdon Resources plc

Mark Abbott 01256 702 292

Buchanan

   Richard Darby, Anna Michniewicz                                                020 7466 5000 

Nominated Adviser and Broker - Cantor Fitzgerald Europe

   David Porter, Sarah Wharry (Corporate Finance)                           020 7894 7000 

Mark Westcott (Sales)

Joint Broker - VSA Capital Limited

   Andrew Monk (Corporate Broking)                                               020 3005 5000 

Andrew Raca (Corporate Finance)

Notes to Editors:

Egdon Resources plc

Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK.

Egdon holds interests in 43 licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets. Egdon is an approved operator in both the UK and France.

Egdon was formed in 1997 and listed on AIM in December 2004.

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 26 years' experience.

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.

Opt-in Agreement with Total E&P UK Limited - PEDL209 30 January 2014

Under the terms of January 2014 opt-in agreement, Total had an option to farm-in to PEDL209 exercisable until 31 December 2015, to earn a 50% interest in the licence from all the licensees by paying 100% of an exploration programme of up to GBP13.47 million (ca. $22 million) which would include seismic acquisition and the drilling of a well. Egdon would continue to be the operator of PEDL209 with Total becoming the operator following the carried work programme.

As consideration for granting of the option, Total made a non-refundable cash payment totalling GBP1,530,025 (ca. $2.5 million). Egdon received the sum of GBP918,015 (ca. $1.5 million).

This information is provided by RNS

The company news service from the London Stock Exchange

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April 04, 2017 02:00 ET (06:00 GMT)