Egdon Resources plc (AIM: EDR), a UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK, today announces its unaudited results for the six months ended 31 January 2020 (“the Period”).
Overview and Highlights
Operational and Corporate
- Production for the Period of 178 barrels of oil equivalent per day “boepd”) (H1 2019: 164 boepd) in line with guidance
- Planning Consent granted on appeal for the Wressle oil field development
- Farm-out agreement signed with Shell U.K. Limited (“Shell”) for P1929 and P2304 (Resolution and Endeavour undeveloped discoveries)
- Springs Road-1 analysis confirms a potentially world class hydrocarbon resource is present in the Gainsborough Trough
- The UK government has imposed a moratorium on high volume hydraulic fracturing for shale gas in England
Financial Performance
- Oil and gas revenues during the period fell to of £0.675 million (H1 2019: £1.210 million) as a result of the weak price environment
- Loss of £1.044 million (H1 2019: £0.724 million) before impairments
- Overall loss for the period of £3.235 million including £2.191 million of impairments (H1 2019: loss of £0.724 million, £Nil impairments)
- Cash and cash equivalents of £0.78 million (H1 2019: £1.78 million)
- Net current assets as at 31 January 2020 of £0.37 million (H1 2019: £2.35 million)
- Net Assets at 31 January 2020 of £27.81 million (H1 2019: £30.00 million)
Post-Period Events
- To date there has been no operational impact from the Government’s restrictions imposed due to Covid-19
- An economic assessment of the Wressle development demonstrates that the project is robust in the current economic environment with a project breakeven price of $17.62/bbl
- Post well technical update indicates the potential for a material and commercially viable resource remains on the Biscathorpe project with a breakeven price of $18.07/bbl
- An equity fundraise subscription to raise £500,000 before expenses, in two tranches with funds to be used to progress near term cash generative projects such as Wressle and general working capital.
Outlook
- Production guidance for the full financial year is retained at 130-140 boepd
Our key operational focus for the coming period will be:
- Developing the Wressle oil field for production start-up in H2 2020
- Completing the farm-out of the Resolution and Endeavour projects with Shell and progressing the acquisition of the planned marine 3D seismic survey
- Progressing plans for a Biscathorpe-2 side-track well
- Maintaining the option for North Kelsey-1 exploration well for drilling in 2021
- Subject to the 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
Online Presentations
Given the current Government guidance on social distancing, no face to face meetings are possible at this time. As such an audiocast of the Interim Results Presentation is available to view via following link:
https://webcasting.buchanan.uk.com/broadcast/5e9abe8931da814c9fc6aad1
Commenting on the results, Philip Stephens, Chairman of Egdon said;
“The highlight of the Period is undoubtedly the grant of planning consent after appeal for the development at Wressle. Our agreement with Shell with regard to our North Sea prospects and the positive results of the test drilling at Springs Road are also significant achievements.
The current market conditions are difficult and the Board’s focus will be on cost discipline and continued safe operations as we seek to navigate the near-term challenges faced by the whole Country and the specifics of our industry. We are confident that we have the right asset base and strategy to deliver long-term value for our shareholders and look forward to more normal times and progressing the exciting opportunities that your Company has.”
View or download 2020 Interim Report