Egdon Resources Finds Gas at Kirkleatham-4

The BDF28 drilling rig has completed drilling and logging operations at Kirkleatham-4 on license PEDL068 in the United Kingdom. The Kirkleatham-4 well reached a TD of 936m within rocks of Carboniferous age on the January 7, 2006. During drilling gas shows were encountered within the target Permian age Zechstein carbonates. Logging operations have now been completed and confirmed the presence of a 19m gas column within the Cadeby Formation. The top of the Cadeby Formation was penetrated at 804.3m where a drilling break and high gas readings were observed. Evaluation of wireline log data indicates high gas saturations and good porosity development within the gas bearing interval. The Kirkleatham-4 well will be completed with 7" casing and the BDF28 rig released. Testing operations will be undertaken using a work-over rig. Further activity at Kirkleatham will be assessed once test results have been evaluated.

On completion of operations at Kirkleatham-4 the drilling rig will mobilize to the Westerdale-1 well site in North Yorkshire where drilling operations are expected to commence during the week of January 16, 2006. Westerdale-1 is designed to test an accumulation 50.5 m up-dip and 3.7 km to the north of the Ralph Cross-1 gas discovery made by Home Oil Limited in 1966. Ralph Cross-1 tested gas at flow rates of up to 6 million cubic feet of gas per day from a 20.5 m gas column in fractured Zechstein carbonates. Additional reservoir objectives are present in the Westerdale-1 well both within the Zechstein and in the underlying Carboniferous sequences. Westerdale-1 will be directionally drilled to a total depth of around 1250m and will take around 21 days to drill.

On completion of operations at Westerdale- 1 the rig will move to Dorset to drill the Portland-1 well which is designed to test the thickness and suitability of a salt sequence for the creation of caverns for gas storage. Site construction has commenced at the Portland-1 well site.

The Company can also report that at Waddock Cross-3, testing operations are ongoing in the horizontal section drilled in the Cycle 3 of the Bridport Sandstone. Initial results indicate pump constrained flow rates of 270 to 400 barrels of fluid per day with an average 12% oil cut. This equates to 32 to 48 barrels of oil per day. The produced oil has not experienced the emulsion problems encountered with the Waddock Cross-2 well test. Downhole pressure gauges will be recovered during the next week and the data analyzed to determine options for the future testing and development of the Waddock Cross accumulation.

Kirkleatham-4 and Westerdale-1 are located in the PEDL068 license in the Cleveland Basin where the Company holds a 20% working interest but is carried for 10% of the first well, Kirkleatham-4, and also holds an option to increase its interest to 25%. The Waddock Cross-3 well was drilled within the PL090 in the Wessex Basin where the Company holds a 45% working interest.