6th Feb 2023 09:55
(Alliance News) - Egdon Resources PLC on Monday emphasised the potential of its portfolio, after securing a farmout option for the Weaverthorpe prospect in North Yorkshire.
Egdon is a Gloucestershire, England-based energy company focused on onshore exploration and production in the UK. It holds interests in 35 licences, and has an active programme of exploration, appraisal and development within its portfolio of oil and gas assets.
The company has signed a farmout option agreement with York Energy Holdings Ltd regarding the onshore production licence, PL081, in North Yorkshire. The licence contains the Weaverthorpe prospect, a relatively shallow bunter sandstone asset immediately up-dip of interpreted gas pay.
According to the terms of the deal, Egdon has six months from last Friday to elect farm into the licence. During the option period, the company has committed to additional technical and operational work in order to de-risk the opportunity, including reprocessing vintage 2D seismic data.
As a consideration for the option, it will pay all of this year's licence fees. Should Egdon choose to exercise the option, it will earn a 70% interest in the licence and assume operatorship. As consideration, Egdon will pay 100% of the costs associated with the planning, drilling, logging, and either short term testing and completion or plugging and abandonment of a well to test the Weaverthorpe Prospect.
It will also pay York a cash sum of GBP100,000, less any licence fees that were paid by Egdon for 2023.
"This farmout option for the Weaverthorpe Prospect represents a significant opportunity for Egdon to increase its exposure to a potentially material gas resource at a time when the UK's reliance on imported energy has come into sharp focus. The deal structure secures the opportunity at low cost whilst we undertake additional technical due diligence through the application of modern seismic processing technology," said Managing Director Mark Abbott.
Egdon shares were trading 14% higher at 3.30 pence each in London on Monday morning.
By Holly Beveridge; Alliance News reporter
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