Settlement Reached with Humber Oil & Gas Limited, PEDL253 Biscathorpe

24 June 2020

Egdon Resources plc (AIM: EDR, “Egdon”) is pleased to advise the signing of a legally binding and confidential settlement agreement (the “Settlement Agreement”) between Egdon Resources U.K. Limited (acting on behalf of the PEDL253 joint venture partners) and Humber Oil & Gas Limited (“Humber”).  The joint parties to PEDL253 have therefore resolved the dispute arising under the JOA and look forward to co-operating in the future in the development of the licence.

Upon implementation of the terms of the Settlement Agreement Egdon Resources U.K. Limited will hold a 35.8% operated interest in PEDL253.

Egdon has previously announced the results of a detailed evaluation of the Biscathorpe project which concluded that a possible material and commercially viable hydrocarbon resource remains to be tested. In summary;

  • Economic modelling indicates a financially robust project even in the current oil price environment
  • The principal Westphalian target has an estimated un-risked gross NPV(10) of £55.6 million
  • Break-even full-cycle economics estimated to be (NPV(10)) US$18.07 per barrel of oil
  • A 57 metre oil bearing section in the Dinantian Carbonate of Biscathrope-2 represents a secondary target with potentially significant commercial upside
  • Future identified drill targets are accessible via a side-track of the suspended Biscathorpe-2 well.

Mark Abbott, Managing Director of Egdon Resources plc, commented: “We are pleased that agreement has been reached with Humber, enabling the project to now move forward with full support from all partners.

Having retained the wellsite, the JV has maintained its optionality to pursue a cost effective side-track to test the resource potential of not only the Basal Westphalian Sandstone play, but also to appraise the oil column demonstrated in the deeper Dinantian Carbonate reservoir.

Our detailed work has concluded that a potentially material and commercially viable hydrocarbon resource remains to be tested at Biscathorpe.

We look forward to providing further updates to shareholders as the Biscathorpe project develops.”