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Share Name Share Symbol Market Type Share ISIN Share Description
Egdon Resources Plc LSE:EDR London Ordinary Share GB00B28YML29 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.05 1.39% 3.65 3.50 3.80 3.65 3.60 3.60 628,423 09:00:16
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 1.1 -1.7 -0.5 - 19

Egdon Resources PLC Operational Update

21/09/2021 7:00am

UK Regulatory (RNS & others)


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RNS Number : 3696M

Egdon Resources PLC

21 September 2021

21 September 2021

EGDON RESOURCES PLC

("Egdon" or "the Company")

Operational Update

Egdon Resources plc (AIM: EDR, "Egdon"), an established exploration and production company focused on the hydrocarbon-producing basins of the onshore UK, provides an update on operations across its portfolio.

Key Highlights :

-- Initial production from Wressle-1 surpassing expectation at 884 barrels of oil per day ("bopd") and 480,000 cubic feet of gas per day on a restricted choke with no formation water seen.

   --      Plans to reduce production constraints and define plateau rate at Wressle-1. 

-- Planning application for the side-track drilling, testing and production at Biscathorpe to be heard in November.

-- Shell U.K. Limited advises that the 3D seismic survey over the Resolution and Endeavour gas discoveries has been delayed beyond February 2022.

-- Detailed well design, facilities specification, and commercial modelling nearing completion for the phased redevelopment of the shut-in Waddock Cross oil field with a Final Investment Decision expected to be made by the end of 2021, which could lead to further drilling activity during 2022.

-- Detailed reservoir engineering work underway at Keddington to support target selection for a side-track development well, which could be drilled in 2022 and access gross Mean Contingent Resources of 567,000 barrels of oil which remain to be produced.

-- A programme to plug and abandon the existing Dukes Wood-1 oil well and recomplete this for geothermal heat production has been developed and will shortly be submitted to the HSE.

Wressle PEDL180 & PEDL182 (Egdon 30%):

The Wressle-1 well has continued to exceed production expectations since the successful completion of the coiled tubing operations on the 19 August 2021. To date, instantaneous flow rates in excess of 884 barrels of oil per day ("bopd") along with 480,000 cubic feet of gas (c. 80 barrels of oil equivalent per day) have been achieved from the Ashover Grit on a significantly restricted choke setting (30.5/64ths) and with a high flowing wellhead pressure. Thus far, no formation water has been seen as the well continues to clean up.

Even with the excellent flow rates seen to date, the full flow potential of the well remains to be fully tested due to constraints being experienced with the gas handling equipment.

The forward plan is to remove these constraints to production and complete the testing of the well's potential before defining a plateau production rate matching the well behaviour to the installed facilities, long term operational objectives and prudent reservoir management.

We can also advise that we have now received the revision to the Environmental Permit, enabling the installation of a combustion plant to facilitate gas to electric generation and a new potential revenue stream.

Since being returned to production on 19 August the well has generated revenues in excess of GBP300,000 for Egdon.

Biscathorpe PEDL253 (Egdon 35.8%):

We now expect the planning application for the side-track drilling, testing and production at Biscathorpe to be heard at a meeting of Lincolnshire County Council's planning committee during November.

Subject to planning the Biscathorpe side-track will target the Dinantian Carbonate, where a 68 metre oil column was discovered in Biscathorpe-2, with gross Mean Prospective Resources of 2.55 million barrels of oil (mmbo), and the Basal Westphalian Sandstone, where gross Mean Prospective Resources of 3.95 mmbo have been estimated by Egdon.

P1929 & P2304 Resolution and Endeavour (Egdon 30%):

Egdon has been advised by licence operator, Shell U.K. Limited, that the 3D seismic survey planned for February 2022, over the Resolution and Endeavour gas discoveries, will not proceed on the original expected timeline. Shell will consult with the OGA to discuss the delay to the survey and we will provide a further update once these discussions have progressed.

A Competent Person's Report (Schlumberger Oilfield UK PLC) has reported gross Mean Contingent Resources of 231 billion cubic feet ("bcf") of gas attributable to the Resolution discovery with Egdon estimating that the Endeavour discovery contains gross Mean Contingent Resources of 18 bcf of gas.

Waddock Cross PL090 (Egdon 55%):

Third party work is currently ongoing to finalise the well design, facilities specification, and commercial modelling for the phased redevelopment of the shut-in Waddock Cross oil field in Wessex Basin licence PL090. 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.

A final investment decision is expected to be made by the end of 2021 which could lead to further drilling activity during 2022.

Keddington PEDL005R (Egdon 45%):

As previously reported, a detailed sub-surface review of the Keddington oil field and the surrounding licence area has highlighted that gross Mean Contingent Resources of 567,000 barrels of oil remain to be produced. This presents an opportunity to increase production via a development well for which planning is already in place.

Detailed reservoir engineering work is currently being undertaken by ERCE to support the final target selection for a side-track development well, which could be drilled in 2022.

In addition, a near-field exploration opportunity exists 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).

Geothermal:

A programme to plug and abandon the existing Dukes Wood-1 oil well and recomplete this for geothermal heat production has been developed for Egdon by Creative Geothermal Solutions Limited and will shortly be submitted to the HSE. It is anticipated that subject to regulatory approval, this work will commence during Q1 2022.

Mark Abbott, Managing Director of Egdon, commented:

"The Wressle well test operations continue to exceed our expectations with instantaneous rates of over 950 barrels of oil equivalent per day achieved so far. The well has already begun to yield a material revenue stream which will transform the financial position of Egdon in the coming period. This production rate means that Wressle is currently the second biggest field in terms of daily production in the onshore UK after Wytch Farm, and we are confident that the well has more to give in the coming period.

We await confirmation from Shell regarding next steps for the Resolution 3D seismic, and we remain optimistic about the long-term potential of this long-burner project for Egdon. Elsewhere in our portfolio, we are making good progress with several nearer-term projects capable of adding further production, revenues and value to the business. We are pleased to see activity gaining momentum across the portfolio and look forward to an active year ahead.

I am also pleased with progress in our nascent geothermal business with plans being advanced for repurposing of the Dukes Wood-1 well and wider opportunities being considered."

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, Lydia Zychowska                                                  020 7220 1666 

Joint Broker & Financial Advisors - VSA Capital Limited

   Andrew Monk (Corporate Broking)                                              020 3005 5000 

Andrew Raca (Corporate Finance)

Notes to Editors:

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

Egdon holds interests in 39 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.

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 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 2007 Petroleum Resources Management System 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) and the Society of Petroleum Evaluation Engineers (SPEE).

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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September 21, 2021 02:00 ET (06:00 GMT)

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