Commencement of drilling operations at Biscathorpe

7 January 2019

Egdon Resources plc (AIM:EDR) is pleased to announce the commencement of drilling operations at the Biscathorpe-2 exploration well on licence PEDL253 in Lincolnshire. The Biscathorpe-2 well was spudded today at 12:30 hours.

The well will be drilled to a total depth of about 2,100 metres below ground level and is expected to take around 30 days to complete. Biscathorpe-2 will target a combined structural/stratigraphic trap at a depth of over 1,800 metres below Mean Sea Level defined on reprocessed three-dimensional seismic data. The targeted Basal Westphalian sandstone reservoir is expected to thicken at the well location to the north of the crest of the structural high which was drilled by the Biscathorpe-1 well (BP, 1987) which found a 1.2m thick, oil saturated section of the sandstone reservoir. Egdon’s AGM Presentation of 6 December 2018

provides further details on the Biscathorpe Prospect, including a cross section and a comparison with the geology of the Reepham field some 20km south west of Biscathorpe, just to the west of our Fiskerton Airfield producing oil field. At the Reepham oilfield, the Basal Westphalian sandstone reservoir thickens dramatically off a ‘structural high’ over a very short distance and a similar development of the target reservoir is expected at Biscathorpe-2.

The chance of success for Biscathorpe-2 is estimated as 40% and the range of Prospective Resources (as estimated by Egdon) is tabulated below.

  P90 P50 P10 Mean
Oil in Place (mmbo) 7.52 29.50 142.00 56.00
Prospective Resources (mmbo) 1.84 7.30 35.30 14.00
Net to Egdon 35.8% interest (mmbo)                   5.0

Following several previously reported farm out transactions by Egdon and Montrose Industries Limited, the current licence interests and expected paying interests* for the well are listed below:

Egdon Resources U.K. Limited (Operator)         35.80% (23.29% share of well cost*)

Montrose Industries Limited                               22.20% (13.34% share of well cost*)

Union Jack Oil Plc                                             22.00% (37.17% share of well cost*)

Humber Oil & Gas Limited                                 20.00 % (26.25% share of well cost*)

(*at the current estimated well cost)

For clarity, the operations at the Biscathorpe-2 wellsite will not, either now or in the future, involve the process of High Volume Hydraulic Fracturing for shale gas.

Mark Abbott, Managing Director of Egdon Resources plc, said:

“We are pleased to report the start of drilling at Biscathorpe-2, one of the largest remaining un‑appraised oil prospects onshore UK. In addition to the defined structural closure, stratigraphic trapping – if present – could lead to significant upside for oil resources. We look forward to updating shareholders with the preliminary results from the well in early-February. “