TIDMEDR
RNS Number : 3696M
Egdon Resources PLC
21 September 2021
21 September 2021
EGDON RESOURCES PLC
("Egdon" or "the Company")
Operational Update
Egdon Resources plc (AIM: EDR, "Egdon"), an established
exploration and production company focused on the
hydrocarbon-producing basins of the onshore UK, provides an update
on operations across its portfolio.
Key Highlights :
-- Initial production from Wressle-1 surpassing expectation at
884 barrels of oil per day ("bopd") and 480,000 cubic feet of gas
per day on a restricted choke with no formation water seen.
-- Plans to reduce production constraints and define plateau rate at Wressle-1.
-- Planning application for the side-track drilling, testing and
production at Biscathorpe to be heard in November.
-- Shell U.K. Limited advises that the 3D seismic survey over
the Resolution and Endeavour gas discoveries has been delayed
beyond February 2022.
-- Detailed well design, facilities specification, and
commercial modelling nearing completion for the phased
redevelopment of the shut-in Waddock Cross oil field with a Final
Investment Decision expected to be made by the end of 2021, which
could lead to further drilling activity during 2022.
-- Detailed reservoir engineering work underway at Keddington to
support target selection for a side-track development well, which
could be drilled in 2022 and access gross Mean Contingent Resources
of 567,000 barrels of oil which remain to be produced.
-- A programme to plug and abandon the existing Dukes Wood-1 oil
well and recomplete this for geothermal heat production has been
developed and will shortly be submitted to the HSE.
Wressle PEDL180 & PEDL182 (Egdon 30%):
The Wressle-1 well has continued to exceed production
expectations since the successful completion of the coiled tubing
operations on the 19 August 2021. To date, instantaneous flow rates
in excess of 884 barrels of oil per day ("bopd") along with 480,000
cubic feet of gas (c. 80 barrels of oil equivalent per day) have
been achieved from the Ashover Grit on a significantly restricted
choke setting (30.5/64ths) and with a high flowing wellhead
pressure. Thus far, no formation water has been seen as the well
continues to clean up.
Even with the excellent flow rates seen to date, the full flow
potential of the well remains to be fully tested due to constraints
being experienced with the gas handling equipment.
The forward plan is to remove these constraints to production
and complete the testing of the well's potential before defining a
plateau production rate matching the well behaviour to the
installed facilities, long term operational objectives and prudent
reservoir management.
We can also advise that we have now received the revision to the
Environmental Permit, enabling the installation of a combustion
plant to facilitate gas to electric generation and a new potential
revenue stream.
Since being returned to production on 19 August the well has
generated revenues in excess of GBP300,000 for Egdon.
Biscathorpe PEDL253 (Egdon 35.8%):
We now expect the planning application for the side-track
drilling, testing and production at Biscathorpe to be heard at a
meeting of Lincolnshire County Council's planning committee during
November.
Subject to planning the Biscathorpe side-track will target the
Dinantian Carbonate, where a 68 metre oil column was discovered in
Biscathorpe-2, with gross Mean Prospective Resources of 2.55
million barrels of oil (mmbo), and the Basal Westphalian Sandstone,
where gross Mean Prospective Resources of 3.95 mmbo have been
estimated by Egdon.
P1929 & P2304 Resolution and Endeavour (Egdon 30%):
Egdon has been advised by licence operator, Shell U.K. Limited,
that the 3D seismic survey planned for February 2022, over the
Resolution and Endeavour gas discoveries, will not proceed on the
original expected timeline. Shell will consult with the OGA to
discuss the delay to the survey and we will provide a further
update once these discussions have progressed.
A Competent Person's Report (Schlumberger Oilfield UK PLC) has
reported gross Mean Contingent Resources of 231 billion cubic feet
("bcf") of gas attributable to the Resolution discovery with Egdon
estimating that the Endeavour discovery contains gross Mean
Contingent Resources of 18 bcf of gas.
Waddock Cross PL090 (Egdon 55%):
Third party work is currently ongoing to finalise the well
design, facilities specification, and commercial modelling for the
phased redevelopment of the shut-in Waddock Cross oil field in
Wessex Basin licence PL090. Independent reservoir modelling has
shown that a new horizontal well on the field could yield
commercial oil production (500-800 bopd). Given the large in- place
oil volume (Mean oil in place of c. 57 million barrels of oil) this
asset has been high graded by the Company as planning consent and
facilities are in place to test this significant opportunity.
A final investment decision is expected to be made by the end of
2021 which could lead to further drilling activity during 2022.
Keddington PEDL005R (Egdon 45%):
As previously reported, a detailed sub-surface review of the
Keddington oil field and the surrounding licence area has
highlighted that gross Mean Contingent Resources of 567,000 barrels
of oil remain to be produced. This presents an opportunity to
increase production via a development well for which planning is
already in place.
Detailed reservoir engineering work is currently being
undertaken by ERCE to support the final target selection for a
side-track development well, which could be drilled in 2022.
In addition, a near-field exploration opportunity exists at
Keddington South, (gross Mean Prospective Resources of 635,000
barrels of oil) and the Louth Prospect (gross Mean Prospective
Resources of 600,000 barrels of oil).
Geothermal:
A programme to plug and abandon the existing Dukes Wood-1 oil
well and recomplete this for geothermal heat production has been
developed for Egdon by Creative Geothermal Solutions Limited and
will shortly be submitted to the HSE. It is anticipated that
subject to regulatory approval, this work will commence during Q1
2022.
Mark Abbott, Managing Director of Egdon, commented:
"The Wressle well test operations continue to exceed our
expectations with instantaneous rates of over 950 barrels of oil
equivalent per day achieved so far. The well has already begun to
yield a material revenue stream which will transform the financial
position of Egdon in the coming period. This production rate means
that Wressle is currently the second biggest field in terms of
daily production in the onshore UK after Wytch Farm, and we are
confident that the well has more to give in the coming period.
We await confirmation from Shell regarding next steps for the
Resolution 3D seismic, and we remain optimistic about the long-term
potential of this long-burner project for Egdon. Elsewhere in our
portfolio, we are making good progress with several nearer-term
projects capable of adding further production, revenues and value
to the business. We are pleased to see activity gaining momentum
across the portfolio and look forward to an active year ahead.
I am also pleased with progress in our nascent geothermal
business with plans being advanced for repurposing of the Dukes
Wood-1 well and wider opportunities being considered."
For further information please contact:
Egdon Resources plc
Mark Abbott, Martin Durham 01256 702 292
Buchanan
Ben Romney, Jon Krinks 020 7466 5000
Nominated Adviser & Joint Broker - WH Ireland Limited
Chris Hardie, Lydia Zychowska 020 7220 1666
Joint Broker & Financial Advisors - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
Notes to Editors:
Egdon Resources plc (LSE: EDR) is an established exploration and
production company focused on the hydrocarbon-producing basins of
the onshore UK.
Egdon holds interests in 39 licences in the UK and has an active
programme of exploration, appraisal and development within its
portfolio of oil and gas assets. Egdon is an approved operator in
the UK. Egdon was formed in 1997 and listed on AIM in December
2004.
Qualified Person Review
In accordance with the AIM Rules - Note for Mining and Oil and
Gas Companies - this release has been reviewed by Mark Abbott,
Managing Director of Egdon, who is a geoscientist with over 30
years' experience and a member of the Petroleum Exploration Society
of Great Britain and a Fellow of the Geological Society. Mr Abbott
has consented to the inclusion of the technical information in this
release in the form and context in which it appears.
Evaluation of hydrocarbon volumes has been assessed in
accordance with the 2007 Petroleum Resources Management System
prepared by the Oil and Gas Reserves Committee of the Society of
Petroleum Engineers (SPE) and reviewed and jointly sponsored by the
World Petroleum Council (WPC), the American Association of
Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation
Engineers (SPEE).
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
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