Egdon Resources have announced preliminary results for the year ended 31 July 2020. 

Operational and Corporate Highlights

• Production during the year was 145 boepd (2019: 182 boepd) ahead of guidance of 130-140 boepd
• Planning permission was granted for the Wressle development on appeal on 17 January 2020 following a public inquiry in November 2019. Full costs were awarded against North Lincolnshire Council and have since been received. Field development operations are progressing well and first oil is targeted during January 2021, which will add 150 bopd to Egdon’s production
• During March 2020, we announced the results of an in-depth assessment of the Biscathorpe project (PEDL253) which identified technically and commercially attractive target areas accessible via a side-track of the suspended Biscathorpe-2 well. A planning application is in the process of being prepared for submission to enable this
• The farm-out of the Resolution and Endeavour gas discoveries (P1929 and P2304) to Shell Oil U.K. Limited (“Shell”) and agreed licence extensions and new work programme obligations with the Oil and Gas Authority (“OGA”)
• During September 2019, the encouraging gas in place results for Springs Road-1 were announced indicating the presence of a potentially world class resource in the “Gainsborough Shales” of the Gainsborough Trough where Egdon holds 71,361 net acres (289 km2)
• During early November 2019, Government announced the introduction of a moratorium on high volume hydraulic fracturing for shale-gas that will remain in place until new evidence is provided. Along with our industry peers we are continuing to work with the OGA and other regulators on this matter
• On 18 June 2020 a confidential settlement was reached with Humber Oil and Gas in respect of PEDL253 litigation and monies were received on 25 August 2020

Financial Highlights

• Gross oil and gas revenues during the period decreased by 56% to £0.96 million (2019: £2.20 million)
• Loss for the year ended 31 July 2020 of £4.75 million after write-downs, pre-licence costs and impairments of £3.03 million (2019: loss of £1.72 million after write-downs, pre-licence costs and impairments of £0.45 million)
• Basic loss per share of 1.53p (2019: 0.64p)
• Cash at bank £0.85 million as at 31 July 2020 (2019: £1.62 million)
• Placing of equity in April 2020 raised £0.50 million (gross of expenses) at a price of 2p per share
• Net current liabilities as at 31 July 2020 of £0.33 million (2019: Net current assets £1.91 million)
• Net assets as at 31 July 2020 of £26.67 million (2019: £30.99 million)

Subsequent Events

• On 25 August 2020 the farm-outs to Shell were completed for  the Resolution and Endeavour assets (P1929 and P2304)
• On 7 September 2020 we received approval for an extension of planning consent to 31 December 2021 for the drilling of North Kelsey-1 (PEDL241) which had been delayed due to COVID-19 restrictions during the earlier part of the year
• PEDL143 Licence relinquished during September 2020
• On 26 November 2020 Egdon announced that it had entered into a £1.00 million loan facility with Union Jack Oil plc
• On 5 January 2021 Egdon finalised the documentation for £1.05 million convertible loan notes with a concert party of Petrichor Holdings BV. The transaction, which will require a whitewash, is subject to shareholder approval through a vote by independent shareholders at a General Meeting to be held on 22 January 2021
• Egdon has been advised by Shell that the Resolution 3D seismic survey is now planned for February 2022, subject to approval by the OGA of an amendment to the licence obligations

Outlook

• Continuing to carefully manage costs and cash through the current challenging operating environment
• Finalising the development of the Wressle oil field for production start-up in January 2021
• Progressing the planning application for a Biscathorpe-2 side-track well to be drilled in 2021 and where we may look to secure a partial farm-out
• Progressing a farm-out of North Kelsey-1 for drilling in 2021
• Progressing the acquisition of the 3D seismic survey over the Resolution and Endeavour gas discoveries in February 2022
• Streamlining the portfolio to concentrate on a smaller number of key assets whilst maintaining our position in core unconventional assets
• Subject to lifting of the current moratorium on hydraulic fracturing operations for shale-gas, progressing the planning and permitting for the drilling and subsequent testing of the Springs Road-2 well
• Reviewing the Energy Transition opportunities within the current portfolio, including repurposing of existing wells for geothermal energy

KeyFacts Energy: Egdon Resources UK country profile