Egdon Commences Drilling Ops at Keddington Field

Egdon announced the start of drilling operations at the Keddington oil field on Lincolnshire License PEDL005(Remainder).

Egdon holds a 75% interest in and is operator of the PEDL005(Remainder) license. The joint venture partners are Terrain, holding a 15% interest and Alba, a wholly owned subsidiary of Nautical Petroleum, with a 10% interest.

The Keddington-4 well will be drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, which was drilled by Candecca Resources in 1998. This oil production well has been shut-in since the drilling of Keddington-3 and 3Z in April 2010. Keddington-4 is planned to penetrate approximately 200 meters of producing Unit 1 sandstone in a new horizontal section. The well is also planned to penetrate the deeper "Namurian" sandstones, which had gas indications in Keddington-3 to provide additional information on this potential gas bearing zone.

The British Drilling and Freezing Limited BDF28 drilling unit began mobilizing to the site on April 1, and operations began on April 4. The plugging-back of the existing well has been completed and the drilling of the sidetrack commenced at 0700 hours on April 9, from a kick-off depth of 2080 meters. The well is intended to be drilled directionally to a total measured depth of around 2750 meters. Drilling and completion operations are expected to last a total of around three weeks.

The well is expected to be completed for free-flowing or pumped production using the existing surface production facilities shortly after the rig is released from the site.

Keddington-4 is designed to increase total field production at a time of high oil prices and provide additional reservoir information in an untested part of the structure to factor into the investment decision on the scale of the gas to electricity generation project planned for the field. This is expected to provide an important additional revenue stream and eventually will enable unconstrained production of oil from the field.

Production from the adjacent Keddington-3z well has been suspended for safety reasons during the drilling operations and will resume once the rig has been demobilized from site and the flow characteristics of Keddington-4 has been determined.

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