Egdon Resources plc (AIM:EDR, "Egdon" or "the Operator") notes the announcement made this morning by Union Jack Oil plc ("UJO" or "the Company") on their acquisition of an additional 35% interest in the producing Keddington Oilfield PEDL005(R) and a 15% Interest in PEDL339 from Terrain Energy Limited. ("Terrain").
Egdon holds a 45% interest in PEDL005(R) and a 65% interest in PEDL339 and is the operator of both licenses.
The UJO release refers to technical work undertaken by Egdon on PEDL005(R) and PEDL339 and included the following statements by UJO which are of relevance to Egdon's shareholders:
"Keddington, currently producing approximately 28 barrels of high-quality oil per day from Carboniferous age sandstone reservoirs, is located along the highly prospective East Barkwith Ridge, an east-west structural high on the southern margin of the Humber Basin.
A detailed, in-depth subsurface review of the Keddington field and the surrounding licence area was conducted by Egdon during 2019, resulting in a fully audited and consistent data set that supports updated resource estimates generated by the Operator.
These geological and geophysical studies indicate that potentially significant resources remain unswept at Keddington, highlighting an excellent opportunity to increase production volumes multi-fold by the drilling of a relatively inexpensive development well from the existing production site. The gross remaining Mean Contingent Resource at Keddington is 567,000 bbls of oil "
Egdon "is finalising the assessment of potential in-fill drilling locations at Keddington with a view to targeting a side-track drilling location.
The Keddington site lease has been extended until 2029. Current planning consent expires in 2058, with approval in place for the drilling of a further two wells.
In addition to the unswept resources in Keddington, a near-field exploration opportunity exists at Keddington South, which has a gross Mean Prospective Resource Volume of 635,000 bbls of oil.
As part of this acquisition, the Company is also acquiring a 15% interest in PEDL339 into which the Louth Prospect, with a gross Mean Prospective Resource of 600,000 bbls of oil, extends from PEDL005(R). Significant additional Prospective Resources, both for oil and gas also exist over the licence areas and includes the North Somercotes Prospect".
Commenting on the updated work reported in the UJO release, Mark Abbott, Managing Director of Egdon Resources plc, said:
"We are encouraged by the results of the subsurface review of our eastern Humber Basin licences which has identified a new low-risk near-field exploration opportunity at Keddington South, additional resources in our producing Keddington oil field and confirmed low risk resources at Louth.
We believe these opportunities can be targeted by drilling from the current Keddington location and present a number of low-risk/low-cost drilling opportunities for Egdon.
We welcome UJO's increased participation in the licences and continued technical contribution and thank Terrain for their active involvement to date."