Egdon Resources PLC (LON:EDR) Final Results

Results for the Year Ended 31 July 2019

Egdon Resources plc (AIM: EDR), a UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK, today announces its audited results for the year ended 31 July 2019. 

Operational and Corporate Highlights

·      Production increased by 117% to 182 barrels of oil equivalent per day (“boepd”) (2018: 84 boepd)

·      Production restarted from the Ceres well during October 2018 following installation of a new gas flow meter

·      Completion of the drilling of Springs Road-1 encountering all three pre-drill targets with a reported hydrocarbon bearing shale sequence of over 429 metres in the Bowland Shale and significant gas indications within the Millstone Grit sequence, deeper parts of the lower Bowland Shale and the Arundian Shale

·      Completion of the drilling of Biscathorpe-1, where despite the primary target being absent, a 35 metre oil column has been identified in the Dinantian Limestone and the well has been suspended for a potential future sidetrack

·      A Competent Person’s Report was published for Resolution indicating Mean Contingent Resources volume of 231 billion cubic feet (“bcf”)    

·      Submission of planning appeal for the revised Wressle development following the refusal of planning consent in November 2018. North Lincolnshire Council advised in July 2019 that it would withdraw its evidence for the public inquiry following agreement of acceptable planning conditions

Financial Highlights

·      Gross oil and gas revenues during the period increased by 81% to £2.20 million (2018: £1.21 million restated)

·      Loss for the year-ended 31 July 2019 of £1.72 million after write-downs, pre-licence costs and impairment of £0.45 million (2018: loss of £1.98 million after write-downs, pre-licence costs and impairments reversed of £0.40 million)

·      Basic loss per share of 0.64p (2018: basic loss per share of 0.76p)

·      Cash at bank £1.62 million as at 31 July 2019 (2018: £2.77 million)

·      Open offer raised £2.17 million (gross of expenses) at a price of 5p per share

·      Net current assets as at 31 July 2019 of £1.91 million (2018: £2.87 million)

·      Net assets as at 31 July 2019 of £30.99 million (2018: £30.73 million)

Subsequent Events

·      On 12 September 2019, Egdon reported the results of the Springs Road-1 analysis which indicates a three-fold increase in resource density for the Bowland Shale interval compared to the previous independent assessment by ERCE in 2014

·      On 2 November 2019, the UK government announced a moratorium on high volume hydraulic fracturing for shale gas in England

·      On 4 November 2019, Egdon announced it had entered into an exclusivity agreement with a large internationally recognised exploration and production company in respect of a farm-out of P1929 and P2304 (Resolution and Endeavour)

·      On 7 November 2019, the Wressle Field Development Planning Inquiry was concluded. A decision is expected before end 2019

Outlook

·      Production guidance for the full financial year 2019-20 is 130-140 boepd

·      Key operational and strategic priorities for the coming period will include:

·      Subject to a positive outcome to the planning inquiry, developing the Wressle oil field

·      Concluding a farm-out of the Resolution/Endeavour projects with our exclusivity partner and acquiring the marine 3D seismic survey

·      Finalising the forward plan for Biscathorpe and advancing a farm-out of the North Kelsey-1 exploration well

·      Subject to lifting of the moratorium, progressing the drilling and testing of the Springs Road-2 well in our core Gainsborough Trough area

Audiocast

·      An audiocast of the Results Presentation will be available to view via the following link from 09.30: https://webcasting.buchanan.uk.com/broadcast/5dcac4eb9535b1405a05ac1d

Commenting on the results, Philip Stephens, Chairman of Egdon said;

“Against a backdrop of continued political uncertainty and challenging operational and market conditions I am pleased to be able to report on a year of increased production and operational activity that has seen the Company make progress in some key strategic areas. “