Egdon updated on changes to certain of its UK license interests as well as details of a recent seismic survey.
Egdon have reached agreement with Europa O&G and Celtique to equalize working interests across contiguous Petroleum Exploration and Production Licenses ("PEDL") 180 and 182 in the East Midlands. Egdon is the current operator of PEDL182 and will assume operatorship of PEDL180. On conclusion of the transaction, which is subject to approval from the Department of Energy and Climate Change ("DECC"), Egdon will hold a 33.33% interest in both licenses reducing from its current 50%. The transaction provides alignment for the planned exploration program for this area, which contains a trend of oil prone structures including the Broughton oil discovery and Wressle Prospect, which spans the two licenses. A joint 3D seismic survey is planned for later in 2011 to firm up drilling locations for the licenses. It is hoped to drill during 2012 as part of a planned multi-well drilling program in the East Midlands.
Egdon have also reached agreement with Celtique whereby Celtique will acquire a 25% interest in PEDL181 from Egdon, again subject to approval by DECC. Following completion, Egdon will hold a 25% interest. Europa is the operator of PEDL181 with a 50% interest.
Egdon's interests in PEDL180 and 181 were acquired from Valhalla Oil and Gas Limited ("Valhalla") earlier in 2011. The licenses are covered by an Area of Mutual Interest agreement between Egdon and Celtique. Celtique will assume 50% of the consideration to Valhalla. This will comprise the payment of a 10% Net Profit Interest ("NPI") on each 25% interest in PEDL180 and PEDL181 assigned to it by Egdon (2.5% net). The NPI is payable from revenues after recovery of pro-rata exploration, development and production costs.
Elsewhere in the East Midlands, Egdon reported the successful completion of a 13 kilometer 2D seismic program over the Burton on the Wolds Prospect in PEDL201 where Egdon holds a 50% operated interest. The Burton on the Wolds prospect is located on the southern margin of the Widmerpool Basin to the South-East of the Rempstone Oil Field and is a four-way dip-closed prospect associated with an underlying seismic anomaly. Indicative prospective resources are estimated by Egdon at around 1.5 million barrels.
Commenting on the recent developments, Egdon's Managing Director Mark Abbott said, "We are pleased to have reached agreement with Europa and Celtique in relation to PEDLs 180, 181 and 182 and to have assumed operatorship of PEDL180. We are now in a position to operate the forthcoming 3D seismic program and develop plans for drilling on this highly prospective trend with a uniform Joint Venture partnership. The early results of the seismic program over the Burton on the Wolds Prospect look encouraging and we hope will lead to a firm drilling location."
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