Acquisition

RNS Number : 8128F

Egdon Resources PLC

21 June 2012

 



For Immediate Release

21 June 2012

EGDON RESOURCES PLC

("Egdon" or "the Company")

Acquisition of Dorset Exploration Limited and Weald Basin Update

Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreement to acquire the entire issued share capital of Dorset Exploration Limited ("DEL").   DEL is a private company which holds 10% interests in Production Licence PL090 and Petroleum Exploration and Production Licence PEDL237, both located in the county of Dorset. Egdon Resources U.K. Limited is operator for both these Licences with a 45% interest in each.

The consideration for this acquisition will comprise £100,000 to be satisfied by the issue of new Egdon shares at completion.  The number of consideration shares will be calculated based on the average closing mid-price for the five days prior to the day of completion.   The commercial date of the transaction is 1 February 2012.

The transaction is subject to approval of the change of control by DECC.

DEL is owned and controlled by Mr. John Rix and his family members.  Mr. Rix was a non-executive Director of Egdon until his retirement from the Board in late 2011.

Licence PL090 contains the Waddock Cross Oil Discovery where recent extended testing has confirmed the potential for a commercial development which the joint venture group expects to sanction within the next few weeks.  In PEDL237 the licence group has identified and delineated a potentially commercial accumulation of oil which was encountered in the 1959 Langton Herring North-1 well but may not have been adequately tested, and has mapped a number of structural leads at the level of the Sherwood Sands, the primary reservoir at the Wytch Farm oilfield. The licence group plans to delineate these leads, which extend into PL090, by reprocessing existing vintage 2D seismic data and/or acquiring new seismic, most likely 3D, with a view to promoting at least one into a viable, drillable prospect.

Egdon estimate that the transaction will add an estimated 11 mmbo of Best Estimate Prospective Resources to Egdon's resource inventory.

The interests in PL090 and PEDL237 are as follows:

Egdon Resources U.K. Limited (operator)                          45.00%

First Oil Expro Limited                                                              26.25%

Aurora Exploration (UK) Limited                                            18.75%

Dorset Exploration Limited                                                     10.00%

Egdon also notes the recent announcement by the operator for Licence PEDL126 (Egdon 10% interest), Northern Petroleum plc ("Northern"), that the Markwells Wood-1 oil discovery well in the South Downs National Park Authority areahas been suspended following the extended well test. The results of this test were below expectations. The possibilities for further action will now be examined by the joint venture group.

Northern has also announced, as operator for  Hampshire Licence PEDL125 (Egdon 10% interest), that the joint venture group has not been able to locate, rent or acquire a suitable drilling location from which to test the Hedge End Prospect, and therefore the licence will be allowed to lapse at the end of its current term. This will reduce Egdon's Best Estimate Prospective Resources by 0.3 mmbo.

Commenting on the acquisition Mark Abbott, Managing Director of Egdon said:

"The acquisition of DEL adds to our existing interests in licences where we have identified significant exploration potential in the Bridport Sandstone and Sherwood Sandstone plays.  It also provides us with an additional 10% interest in the Waddock Cross oil discovery, where we anticipate a decision on development in the next few weeks." 

For further information please contact:

Egdon Resources plc

Mark Abbott                                                                                            01256 702292

Buchanan

Richard Darby, Gabriella Clinkard                                                   020 7466 5000

Nominated Adviser and Broker - Seymour Pierce

Jonathan Wright(Corporate Finance)                                              020 7107 8000

Richard Redmayne (Corporate Broking)

Notes to Editors:

Egdon Resources plc

Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK and Europe. 

Egdon currently holds interests in thirty licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets.  Egdon is an approved operator in both the UK and France.

Egdon was formed in 1997 and listed on AIM in December 2004.

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 26 years' experience.

 

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