Egdon Resources Underscores Interim Results for January 2009
Egdon Resources plc, the exploration and production company primarily focused on the hydrocarbon-producing basins of the onshore UK, and mainland Europe today announces its Interim Results for the six months ended January 31, 2009.
The Company is listed on AIM under the code EDR.
- Production during the period of 8,037 barrels largely from Keddington as Avington production restarted only on January 23, 2009 (2008: 18,387 barrels)
- Award of Pontenx Permit in France
- Spudded Dukes Wood-1 well during November 2008 - well to be drilled to target horizon in Q3 2009
- Kirkleatham term sheet signed for gas sales - target of Q4 2009 gas sales
- Kirklington oil field acquired and in the process of being upgraded to restore production
- Portfolio of 26 licences in UK and France at January 31, 2009
Financial and Corporate Highlights
- Maiden Profit for period from continuing operations of £133,000 (2008: loss £1,494,000)
- Revenues during the period of £305,000 (2008: £ 758,000)
- Earnings per share from continuing activities for period of 0.19p (2008: loss of 2.23p)
- Net current assets as at January 31, 2009 £2.046 million (January 31, 2008: £3.3 million)
- Net cash of £1.8 million
- No borrowings
- Completion of the sale of a 10% minority interest in PEDL005(Remainder) to Alba Resources Limited containing the Keddington oil field for £260,000
- Acquisition of YCI Resources completed during March 2009 increasing interest in Avington oil field from 20% to 36.667%
Commenting on the period, Philip Stephens, Chairman of Egdon said, "I am pleased to report a maiden profit for Egdon for the six months to January 31, 2009. This has been as a result of continued oil production from our Keddington oil field and the sale of a 10% interest in the Keddington field for more than our original acquisition price. The fact that this has been achieved against a backdrop of significantly lower oil prices, difficult market conditions and delays in some of our projects has been pleasing."
Exploration - Positioning the company for future growth
Egdon's strategy is to develop its high-potential exploration portfolio as a platform for future growth whilst restricting 2009 exploration expenditure, as we concentrate our near-term resources on further developing our production and revenue streams.
As part of this process we continue to evaluate our existing licences in the UK and France through ongoing technical work and putting in place the necessary landowner and planning consents to enable future drilling. Egdon has an objective of drilling 3 to 4 exploration and appraisal wells per year from 2010 onwards. The Company is currently working towards the submission of planning applications for exploratory drilling at Winfrith-1 in Dorset, North Somercotes-1 in Lincolnshire and Westerdale-2 in North Yorkshire during 2009. An application is also currently being considered for the Holmwood-1 well in Surrey operated by Europa Oil & Gas.
As reported last year Egdon has identified France as a focus area and I am pleased to report that we have made good progress in further growing our business in France during the period with the award of the Pontenx Permit, the pending award of the Gex Permit and a further application for the Navacelle Permit which is awaiting determination.
The Pontenx Permit was ratified on 16 December 2008 and published in the Official Journal on 20 January 2009. Egdon will operate the permit with a 40% interest through its wholly owned subsidiary Egdon Resources (New Ventures) Ltd. The Pontenx Permit is located on the southern margins of the Parentis Basin, an oil productive region on the Atlantic coast of France, to the south of Bordeaux where France's largest onshore oil field, Parentis, is located. The Pontenx Permit contains the abandoned Mimizan Nord heavy oil field and a number of high potential leads and prospects adjacent to or up-dip of wells with good oil shows and tests. The permit covers an area of 313 square kilometers and has a four year initial term. The phased work program will comprise an initial two years of geological and seismic studies including a review of the rejuvenation potential of the Mimizan Nord abandoned oil field. A second contingent phase will involve the acquisition of new seismic data and the drilling of a well.
The Gex Permit is currently awaiting ratification having successfully been through the competition period. Once awarded Egdon will hold a 40% interest in this large permit (932 square kilometres) which is located in the Jura/Molasse Basin adjacent to the Swiss Border. The exploration targets are oil prospects in shallow Molasse sandstones and large (up to one trillion cubic feet) potential Triassic gas prospects. We anticipate formal award of the permit during summer 2009. The work program will comprise an initial two year phase of geological mapping and gravity data acquisition followed by a contingent three years which would include seismic acquisition and drilling.
The Navacelle application is located in the South East Basin of France close to the town of Ales. Egdon has identified a series of large anticlines where previously drilled wells have demonstrated the presence of gas in tight carbonate reservoirs and which are candidates for fracture stimulation to produce commercial gas flows. Egdon has a 60% interest in the application which has had a number of competing applications. The French Ministry will determine the final award during the next few months.
We continue to manage our portfolio of oil and gas assets to maximise shareholder value. During the period we sold a 10% interest in PEDL005 (Remainder) containing the Keddington oil field to Alba Resources Limited for a cash consideration of £260,000. This sale of a minority interest in Keddington provided a valuable addition to our near-term cash resources whilst setting a marker for the value of our remaining interest in the field.
Egdon has reported best estimate prospective resources of 170 million barrels of oil equivalent in over 50 prospects. With this high number of prospects we have decided to market a number of farm-out opportunities with the aim of managing risk and accelerating drilling activity on a number of key projects.
- Drilling and Completion Tick Up in the UK (Sep 21)
- British Shale Gas Gets Boost From Court Ruling On Permit (Dec 20)
- Egdon Increases Stake in PEDL201 (Nov 16)