Egdon Resources plc is pleased to report that it has reached agreement with Nautical Petroleum AG, a wholly owned subsidiary of Nautical Petroleum plc, to sell 15% interests in onshore UK Petroleum Exploration and Development Licences (PEDLs) PEDL118 and PEDL203 located in Nottinghamshire.
The consideration comprises a cash sum payable on completion of £200,000 and the payment of £150,000 towards Egdon's costs of the next well to be drilled on PEDL118 or PEDL203. The effective date of the transaction is 31 December 2011.
PEDL203 contains the Kirklington-3z producing well which was drilled in 2010 and produced at rates of 15-20 bopd. The Kirklington oil field has all consents and approvals in place for production but is currently shut-in awaiting development of Dukes Wood-1.
The contiguous licence PEDL118 contains the abandoned Eakring-Dukes Wood oil field where the Dukes Wood-1 well was drilled and tested in 2010, with the Ashover Grit "AG4" reservoir interval producing at rates of around 20 bopd. It is intended to dual-complete the Dukes Wood-1 well for production from the AG4 reservoir and for water disposal in the Sub Alton Crawshaw interval. The development has received planning consent and is awaiting environmental and other approvals before being brought into production in conjunction with Kirklington in the first quarter of 2012.
Egdon has also identified a number of independent targets on the Eakring/Dukes Wood structure including previously undrilled highs such as Eakring North where additional wells may be drilled at some future point.
The transfers of interest are subject to amongst other things approval by the Department of Energy and Climate Change.
Following completion the interests in the licences will be as follows:
For PEDL118: Egdon Resources U.K. Limited 50%; Terrain Energy Limited 25%; Nautical Petroleum A 15%; and Angus Energy Eakring Development Ltd 10%.
For PEDL203: Egdon Resources U.K. Limited 50%; Terrain Energy Limited 25%; Nautical Petroleum A 15%; and Angus Energy Kirklington Development Ltd 10%.
Commenting on the sale Egdon's Managing Director Mark Abbott said:
"This transaction provides a useful cash injection to Egdon ahead of the development of the Dukes Wood-1 well which is expected towards the end of first quarter of 2012. The deal also provides Egdon with a substantial carry on the next well to be drilled in the area."
