Egdon Resources plc (AIM: EDR), a UK focused energy company, today announces its unaudited results for the six months ended 31 January 2022 (“the period”).
Overview and Highlights
Operational and Corporate
- Production during the period increased by 156% to 43,420 barrels of oil equivalent (“boe”) equating to 205 boe per day (“boepd”) (H1 2021: 16,928 boe and 92 boepd)
- Wressle production has significantly exceeded the original 500 barrels of oil per day (“bopd”) expectation and is currently producing at permit constrained rates of 760-800 bopd following upgrades to the production facilities
- Egdon has assumed the operatorship, increased its equity to 40% and agreed an extension to 20 March 2024 in PEDL343 which contains the Cloughton gas discovery
- Planning permission was refused for the drilling of a side-track well, testing and long-term production at the Biscathorpe project
Financial Performance
- Oil and gas revenues increased by 500% during the period to £2.551 million (H1 2021: £0.424 million) as a result of significantly increased production and strengthening commodity prices
- Profit before impairments/write backs of £0.715 million (H1 2021: loss of £0.763 million)
- Overall profit for the period of £1.222 million including £0.507 million write-back (H1 2021: loss of £1.039 million including £0.276 million of impairments)
- Cash and cash equivalents of £2.084 million (H1 2021: £2.422 million and 31 July 2021: £
- Net current assets as at 31 January 2022 of £1.165 million, which includes UJO debt of £1.07 million and £0.417 million deferred consideration for Wressle (31 January 2021: net current liability of £0.126 million, which includes liability for £0.962 million convertible loan and £0.417 million deferred consideration for Wressle)
Subsequent Events
- On 10 March 2022 a revised incentive package was put in place for all employees through the issue of new share options and the cancellation of all historical share options
- On 14 March 2022, planning permission was refused to extend the existing consents to drill the North Kelsey-1 exploration well and will be appealed during H2 2022
- On 5 April 2022 the Government announced that it had commissioned the British Geological Survey to advise on the latest scientific evidence around shale gas extraction
- An appeal against the refusal of planning for the Biscathorpe project was submitted on 12 April 2022
- During April 2022, Shell advised Egdon and the North Sea Transition Authority (“NSTA”) of its intention to withdraw from licences P1929 and P2304, containing the Resolution and Endeavour gas discoveries. Egdon is considering its options, including its ongoing commitment to the licences and will discuss these options with the NSTA.
Outlook
- Post-period end production and revenues have continued to be strong with February and March revenues of £0.480 million and £0.953 million respectively
- The Company is funded for all near-term committed activity including the loan repayment of £1.07 million due in May 2022
Our key operational focus for the coming period will be:
- Continuing to optimise oil and gas production from the Ashover Grit reservoir at Wressle, building on the strong performance to date
- Progressing gas monetisation at Wressle
- Finalising plans for development of the material Contingent Resources in the Penistone Flags at Wressle
- Progressing drilling plans to target incremental oil production / near field exploration opportunities at the Keddington oil field and the field redevelopment at Waddock Cross
- Securing planning consent via appeal for the Biscathorpe and North Kelsey projects
- Further developing the Company’s energy transition opportunities including repurposing of the Dukes Wood-1 well for geothermal heat
Online Presentation and audiocast
A webcast of the interim results presentation will be available from 07.00 through the following link:
https://webcasting.buchanan.uk.com/broadcast/62458a79893940516d342a2a
Commenting on the results, Philip Stephens, Chairman of Egdon said;
“The period has been has been an exceptional one for the Company. Revenues have increased fivefold and this has resulted in a return to profit after the challenges of recent years. Significantly increased commodity prices and increased production have made this possible. The Wressle field continues to exceed our expectations and the Ceres gas field is providing a late life renaissance.
Production continues at a high level and the resultant positive cash flow supported by continuing high commodity prices enables us to be confident that we will be able fully to fund our current plans.”