Egdon Reports Production Delays at UK Projects
Egdon provided an update on the progress of operations at three key UK projects.
Following weather related delays through December, the Company can report that all civil, mechanical and electrical construction has now been completed at Egdon's operated Kirkleatham gas development in PEDL068 where the Company holds a 40% interest. Final snagging and pre-commissioning activity is nearing completion and we anticipate commissioning and first gas within the next few weeks. We will provide a further update to shareholders once first gas is achieved.
As previously reported the prolonged maintenance shut-down of the BP Cleeton Platform and associated infrastructure has meant that the Ceres Gas Field (of which Egdon holds a 10% interest) has been shut-in since June 2010. Egdon is pleased to advise that these works are now approaching completion. However, during recent testing of the Ceres/Eris production systems anchor damage was discovered to the Eris umbilical and a repair is underway to allow gas flows from the fields to be resumed. The operator, Centrica, is progressing these repairs as a priority and has advised that work should be completed around mid-April. Assuming a successful conclusion to other outstanding works it is therefore anticipated that gas production from Ceres will resume a few weeks afterwards.
Egdon also expects to commence further drilling operations at the Keddington oil field, in Lincolnshire license PEDL005 (Remainder), in early April. The planned Keddington-4 well will be a horizontal sidetrack from the Keddington-1Z donor well at a kick-off depth of 2080 meters and will be drilled to a total depth of around 2750 meters, which will include a horizontal section of up to 500 meters. This well is designed to increase total field production at a time of high oil price and provide additional reservoir information in an untested part of the structure to enable the investment decision on the scale of the gas to electricity generation project. This is expected to provide an important additional revenue stream and eventually enable unconstrained production of oil from the field. We will provide further details of the well at commencement of operations. Production from site will be shut-in for the duration of these operations which are expected to last around 30 days.
Commenting on the update Egdon's Managing Director Mark Abbott said, "We share our shareholders' frustrations with the delays to production at Kirkleatham and Ceres. With the anticipated start-up of production at Kirkleatham, further drilling at Keddington and the eventual restoration of production at Ceres expected towards the end of April we can look forward to a significant increase in production and revenues within the next two months."
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