Egdon Secures UK Licence Extensions

Egdon Resources has secured offshore UK licence extensions provided that it farms out shares to its unnamed potential partner soon, it said November 27.

The regulator Oil & Gas Authority has granted six-month extensions for both P1929 and P2304 provided that Egdon can show to the OGA's satisfaction by the end of January that a farm-in agreement has been fully executed which provides for funding of the licence work programme; and that it can show by the end of March that it is on track to deliver a future programme of 3D seismic data acquisition across both licences.

Egdon said it expected "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."

Licence P1929 contains the Resolution gas discovery which Schlumberger Oilfield estimates mean contingent gas resources of 231bn ft³ with a P90 to P10 range of 100bn-389bn ft³. Licence P2304 contains an extension of the Resolution discovery and the Endeavour gas discovery which Egdon estimates contains mean contingent resources of 18bn ft³, with a P90 to P10 range of 10bn-28bn ft³.

CEO Mark Abbott said the extensions followed its "recent announcement of securing an exclusivity agreement with a large internationally recognised exploration and production company as our preferred partner for Resolution and Endeavour."

The OGA's decision "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."