Egdon Resources plc has reached an agreement to acquire an additional 20 percent interest in license PEDL068 from DESS Energy Limited, bringing its total interest to 68 percent.
Egdon is the operator of PEDL068, which is located in the Cleveland Basin of North Yorkshire, UK. This transaction follows DESS’ acquisition of Sterling Resources (UK) Limited’s 47 percent interest in the license.
As consideration for this acquisition, Egdon will bear DESS’ retained 20 percent share of ongoing expenditure for the next six months and will accept liability for DESS’ 20 percent share of the existing abandonment liability for the Kirkleatham site and Kirkleatham-1 well, but not for any future works. Egdon estimate that this transaction will add approximately 1.75 billion cubic feet of best estimate contingent and prospective conventional resources to its portfolio.
Under a separate transaction, DESS has also sold a 5 percent interest to existing PEDL068 partner Montrose Industries Limited.
The acquisition is subject to approval by the Oil and Gas Authority. On completion of these transactions, Egdon will own 60 percent of PEDL068, with DESS holding a 22 percent stake, Montrose holding a 10 percent stake and Yorkshire Exploration Limited holding the remaining 8 percent stake.
“This acquisition builds on our existing interest in PEDL068, adding additional resource potential to the company at low cost and complements our pending award of surrounding license PEDL259 in the 14th Onshore Licensing Round in what was a highly sought after region,” said Mark Abbott, managing director of Egdon, in a company statement.
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