The consideration for the acquisition was £100,000 in cash and the issue of 10,494 Egdon Ordinary shares. In addition, Egdon has granted to Stag a Gross Overriding Royalty of 5% of future production from the licenses.
Application has been made for the new shares to be admitted to AIM and admission is expected to take place on 23 October 2007. Following admission, the Company will have 67,801,840 ordinary shares in issue and an equivalent number of voting rights.
License PEDL118 (Egdon 100%) contains the Eakring-Dukes Wood abandoned oil field, which produced from 1940 until 1966. Egdon believe there is potential to rejuvenate the field to take advantage of increased oil prices, improved technology and the recognition of undrilled and undrained parts of the field.
Planning approval is in place for the drilling of the Eakring North prospect which will test an undrained high at the north of the Eakring-Dukes Wood structure. Egdon estimate that the oil in place within the Eakring North prospect is in the range 1.0 to 2.1 million barrels. Options will be investigated for the restoration of production from some of the existing abandoned wells on the field. In addition, reservoir modeling will be undertaken to determine the potential to access undrained areas of the field and for enhanced oil recovery from the un-produced Wingfield Flags reservoir which Egdon estimate has potential oil in place in the range 9 to 12 million barrels. Licenses PEDL094, PEDL130 and PEDL132 contain a number of identified leads and prospects and will be evaluated for further drilling opportunities during 2008.
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