Egdon Resources plc (AIM:EDR) is pleased to provide an update in relation to the Mairy Permit (the “Permit”), located in the eastern part of the Paris Basin, onshore France.

Egdon has been informed by the operator, Hess Oil France (“Hess”), that drilling operations commenced on 20 January 2013 at the Huiron-1 exploration well in the Permit. The Huiron-1 well will evaluate the hydrocarbon potential of the Jurassic, Rhaetian and older formations and is expected to take around 60 days to drill.

In addition, Egdon is pleased to advise that it has finalised a farmout of part of its interest in the Mairy Permit to Hess. Under the terms of the farmout, Egdon will transfer an unencumbered 35% interest in the Permit to Hess, taking their total beneficial interest to 85%, in return for a carry of the well costs attaching to Egdon’s retained 15% interest, capped at the level of a gross cost of $10.25 million for the Huiron-1 well. Additionally Hess will carry Egdon for $0.5 million of other general and administrative costs on the Permit. The effective date for the farmout is 1 January 2012. The farmout is subject to the standard government approval process.

Egdon also advises that it has reached agreement with Geoex Eastern Limited (“Geoex”) to reduce the burden of an existing Overriding Royalty on the Permit from 4.5% of Egdon’s pre-Farmout interest to 4.5% of the retained 15% interest only. The consideration payable to Geoex for this restructuring comprises $100,255 payable in cash and $100,000 in new Egdon Ordinary shares calculated by reference to the average closing price for the five trading days prior to completion. Accordingly, application has been made for admission of 595,207 new Ordinary shares to trading on AIM, which is expected to become effective on or around 25 January 2013. The newly issued shares represent 0.45 per cent. of the enlarged share capital of the Company.

The total number of Egdon Ordinary Shares in issue is now 132,787,543. Therefore, the total number of voting rights in the Company is 132,787,543.

Commenting on developments with the Mairy Permit, Mark Abbott, Managing Director of Egdon, said;

“We are pleased to have finalised the restructuring of our interest in the Mairy Permit and as a result have significantly reduced our financial exposure to the Huiron-1 well. We await the results of the well with interest.”