Egdon has reached agreement to acquire the entire interest of Valhalla in two onshore UK Petroleum Exploration and Development Licenses ("PEDLs"). The interests to be acquired comprise 50% of PEDL180 and 50% of PEDL181, which are located in the East Midlands Petroleum Province in the County of Lincolnshire. The consideration for the acquisition will be the grant to Valhalla of a Net Profit Interest ("NPI") of 10% of the acquired interest in each of the licenses. The NPI will be payable from any revenues after recovery of allowable exploration, development and production costs.
PEDL180 and 181 were awarded in the 13th UK Landward Licensing Round in 2008 and are located adjacent to Egdon's operated licenses PEDL182 and PEDL241 where the Company holds a 50% interest. PEDL180, covering an area of 100 square kilometres, contains the Wressle Lead, mapped as extending into Egdon's existing PEDL182 and located to the South East of the Crosby Warren producing oil field and between oil discoveries at Brigg and Broughton . PEDL181, located to the East of Egdon's existing licenses, is a large license covering over 540 square kilometres and contains among other interesting structures the Caistor Lead, defined on 3D seismic data. Both licenses are operated by Europa Oil and Gas and are subject to a drill or drop decision during 2011.
The acquisition is subject to regulatory approval from the Department of Energy and Climate Change (DECC), and approval from the joint venture partner.
Commenting on the acquisition Egdon's Managing Director Mark Abbott said, "The acquisition of these licenses from Valhalla provides Egdon with access to further high potential acreage in one of our core exploration areas and reinforces our UK onshore growth strategy."
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