AIM-listed Egdon Resources has advised that the Oil and Gas Authority ('OGA') has granted licence extensions to UK offshore licences P1929 and P2304. Egdon's subsidiary, Egdon Resources U.K. ('ERUK'), is the operator and currently holds a 100% interest in both licences.
The OGA has granted a six month extension to both P1929 and P2304 to 31 May 2020 with obligations as follows:
- By 31 January 2020, demonstrate to the OGA's satisfaction that a farm-in agreement has been fully executed which provides for funding of the licence work programme; and
- By 31 March 2020, demonstrate to the OGA's satisfaction that the Licensee is on track to deliver a future programme of 3D seismic data acquisition across both Licences.
We anticipate further engagement with the OGA during the period of the licence extension to agree the nature and timing of the forward work programme and to reach agreement on the duration of a further licence extension to accommodate these activities.
P1929 contains the Resolution gas discovery where a Competent Persons Report by Schlumberger Oilfield UK (April 2019) reported estimates of mean Contingent Gas Resources of 231 billion cubic feet of gas ('bcf') with a P90 to P10 range of 100 to 389 bcf, attributable to the Zechstein reservoir in the 1966 gas discovery made by Total in well 41/18-2. P2304 contains an extension of the Resolution discovery and the Endeavour gas discovery which Egdon estimates contains mean Contingent Resources of 18 bcf, with a P90 to P10 range of 10 to 28 bcf.
The news follows from the announcement of 4 November 2019, advising that ERUK had signed an exclusivity agreement in respect of Licence P1929 and P2304 with a large internationally recognised exploration and production company.
Despite entry into the Agreement, no assurance can be provided that a commercial transaction will ultimately be concluded with the Counterparty. The Company will provide further updates in respect of these matters in due course.
Commenting, Mark Abbott, Managing Director of Egdon Resources, said:
'We are pleased to have secured extensions from the OGA for both P1929 and P2304 which contain the Resolution and Endeavour gas discoveries, key conventional projects for Egdon. This follows on from our recent announcement of securing an Exclusivity Agreement with a large internationally recognised exploration and production company as our preferred partner for Resolution and Endeavour.
Today's news represents further positive progress for these projects and results from the proactive and constructive engagement between Egdon, the Counterparty and the OGA. Having secured the licence extensions, our focus now turns to finalising a farmout agreement and we look forward to updating shareholders on progress in this regard in the New Year.'
Source: Egdon Resources