Under the terms of the agreement Seven Star will fully fund the planning for and drilling of an appraisal/development well on the Nooks Farm accumulation within two years of this agreement. Subject to certain conditions being met, Seven Star will operate the drilling activity.
Following the farm-in the license interests will be as follows:
--Egdon Resources Plc 46% --Seven Star Natural Gas Limited 50% --Altwood Petroleum Limited 4%
The Nooks Farm accumulation was discovered by Shell in 1982, with the Nooks Farm-1a well encountering gas bearing sandstones of Carboniferous age at a depth of 430m relative to sea level. The well achieved a maximum flow rate of 1.12 million cubic feet of gas per day on test. Estimates of the volumes of gas in place at Nooks Farm have been independently assessed as being in the range of 0.88 to 3.83 billion cubic feet of gas. Development options for Nooks Farm are likely to involve on-site electricity generation.
Seven Star, a wholly owned subsidiary of UK Onshore Gas Limited, also operates Production License ("PL") 213 which includes the Calow gas field near Chesterfield in Derbyshire which was developed by BP in the 1960's.
Assignment of the license interest to Seven Star is subject to the approval of the Secretary of State for Trade & Industry.
Commenting on the agreement, Mark Abbott, Joint Managing Director of Egdon, said: "We are happy to have concluded agreement with Seven Star to progress activity on the Nooks Farm gas discovery. This project was not at the top of Egdon's priority list so with the involvement of Seven Star we can now look forward to the earlier potential development of Nooks Farm."
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