AIM-listed Egdon Resources has advised that further to the announcement of 20 December 2022 it has completed the acquisition of the entire issued share capital of Aurora Production (UK) from Aurora Petroleum.
Aurora Production is a private company, which holds an 18.75% interest in the Edgon operated licence PL090 which contains the Waddock Cross oil field and an 8.33% interest in the IGas operated licence PEDL070 which contains the Avington oil field.
Egdon's interest in the Waddock Cross oil field (PL090) increases to 73.75% and to 56.04% in the remaining parts of PL090 (excluding the Waddock Cross oil field). Waddock Cross is currently shut-in. Independent reservoir modelling has shown that a new horizontal well on the field could yield commercial oil production (500-800 bopd). Given the significant mean in-place oil volume of c. 57 million barrels, this asset has been high graded by Egdon for redevelopment.
Egdon has increased its holding in the Avington oil field to 36.33%. Avington remains shut-in, with work ongoing to redevelop the field during H1 2023.
Egdon estimates that the transaction adds approximately 0.614 million barrels of Best Estimate Contingent and Prospective Resources of oil to its resource inventory.
The consideration for this acquisition is the assumption by Egdon of all ongoing liabilities on these licences, including all abandonment liabilities, from the commercial date of the transaction, which is 30 September 2022.
As part of the transaction Egdon has received a cash sum from the Vendor of £0.288 million, less the interim period costs, which reflects the current estimate in relation to the abandonment liabilities. Aurora Production has also granted Net Profit Interests to the Vendor of 10% on each of the licence interests. In the event that profitable production is established, the Vendor will be reimbursed the £0.288 million.
Aurora Production also has accumulated upstream ringfenced tax losses of ca. £90 million that should be available to offset tax on future profits.
Commenting on the acquisition, Mark Abbott, Managing Director of Egdon said:
'We are pleased to have completed this acquisition, which builds on our existing interests in the Waddock Cross and Avington oil fields. Both assets have active plans in place to rejuvenate oil production. The acquisition therefore adds potential for near-term incremental production, adds to our resource base and delivers substantial tax losses that may be utilised to offset future taxes.'
Source: Egdon Resources
