Company Announcements

            30 March 2020

EGDON RESOURCES PLC

 ("Egdon" or "the Company")

Biscathorpe Assessment Demonstrates Significant Commercial Upside

Egdon Resources plc (AIM: EDR, "Egdon") is pleased to provide an update on the Biscathorpe Project in Lincolnshire Licence PEDL253 where the Company holds a 44.75% operated economic interest.

Highlights

·      Economic modelling indicates a financially robust project even in the current oil price environment

·      The principal Westphalian target has an estimated un-risked gross NPV(10) of £55.6 million

·      Break-even full-cycle economics estimated to be (NPV(10)) US$18.07 per barrel of oil

·      A 57 metre oil bearing section in the Dinantian Carbonate of Biscathrope-2 represents a secondary target with potentially significant commercial upside

·      Future identified drill targets are accessible via a side-track of the suspended Biscathorpe-2 well.

Biscathorpe is located within the proven hydrocarbon fairway of the Humber Basin, on-trend with the Saltfleetby gasfield and Keddington oilfield (Egdon 45%) which produces oil from a Carboniferous Westphalian aged reservoir, the principal target at Biscathorpe.

The PEDL253 Joint Venture partnership has now completed extensive and detailed studies of the Biscathorpe project, including the reprocessing and remapping of 264 square kilometres of 3D seismic. This work has been integrated with the results of the Biscathorpe-2 well, resulting in a significantly improved understanding of the prospectivity in the Biscathorpe project area. The results of this substantial piece of work have concluded that a possible material and commercially viable hydrocarbon resource remains to be tested.

Accessible target areas have been identified, where evidence for a thickened Westphalian sandstone reservoir interval is evident on the reprocessed 3-D seismic. These areas can be targeted by a side-track of the existing Biscathorpe-2 well which was suspended following drilling operations in 2019.  The side-track will also target the oil column logged in the underlying Dinantian Carbonate in Biscathorpe-2, as detailed below.

The gross Mean Prospective Resources associated with the Westphalian target area are estimated by Egdon to be 3.95 million barrels of oil (mmbbls), with an upside case of 6.69 mmbbls.  Preliminary economic modelling demonstrates that the Westphalian target is economically robust in the current oil price environment with break-even full cycle economics estimated at US$18.07 per barrel and an NPV(10) valuation of £55.60 million.

The Westphalian objective was absent at the Biscathorpe-2 well location, however, a total of 57 metres of oil bearing, Dinantian Carbonate has been confirmed by petrophysical analysis. Hydrocarbon shows with background gas and sample fluorescence were recorded across the entire section from Top Dinantian Carbonate to the Total Depth ("TD") of the well (an interval of over 150 metres). 

A geochemical analysis of the gas data and hydrocarbons extracted from drill cuttings was originally commissioned by Union Jack and carried out by Applied Petroleum Technology (UK) Limited ("APT"). The results of this analysis show a hydrocarbon column of 33-34 degree API gravity oil comparable with nearby producing fields. 

An assessment of the Dinantian oil volumes indicates gross Mean Stock Tank Oil Initially in Place ("STOIIP") of 24.3 mmbbls with an upside STOIIP case of 36 mmbbls.

Although the Dinantian is not considered to be the primary target, should there be effective permeability, or the presence of fractures within this section there is the possibility of a further commercially viable play being present within the Biscathorpe licence area that would add considerable resources upside over and above those associated with the principal target in the Westphalian reservoir.

Commenting, Mark Abbott, Managing Director of Egdon Resources plc, said:

"We are highly encouraged by the post-well evaluation of the Biscathorpe project area which has now benefited from an integrated assessment of the 2019 well data and reprocessed 3D seismic data. This work has concluded that a potentially material and commercially viable hydrocarbon resource remains to be tested.

Having retained the wellsite, the JV has maintained its optionality to pursue a cost effective side-track to test the resource potential of not only the Basal Westphalian Sandstone play but also to appraise the oil column demonstrated in the deeper Dinantian Carbonate reservoir.

I look forward to being able to update all stakeholders as we progress our plans for this potentially significant oil accumulation."

For further information please contact:

Egdon Resources plc

Mark Abbott / Martin Durham                                                     01256 702 292

Buchanan

Ben Romney, Chris Judd                                                           020 7466 5000

Nominated Adviser and Joint Broker - Cantor Fitzgerald Europe                    

David Porter/ Rick Thompson (Corporate Finance)                   020 7894 7000

Caspar Shand Kydd (Sales)

Joint Broker - 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 UK-based exploration and production company focused on onshore exploration and production in the hydrocarbon-producing basins of the UK. 

Egdon holds interests in 44 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 is 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 2018 Petroleum Resources Management System (PRMS) 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),  the Society of Petroleum Evaluation Engineers (SPEE), the Society of Exploration Geophysicists (SEG), the Society of Petrophysicists and Well

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.

Glossary of Terms

API degree gravity - is a commonly used index of the density of a crude oil or refined products. API stands for American Petroleum Institute which is the industry organisation that created this measure. A crude oil will typically have an API Gravity of between 15 and 45 degrees. Higher API gravities indicate a lighter (lower density) crude oil.

Prospective Resources - are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence, but which have not yet been drilled.

Stock Tank Oil Initially In Place ("STOIIP") - is the volume of oil in a reservoir prior to production. Stock tank barrels refers to the volume of oil at surface pressure.

Side-Track - A well drilled directionally out of an existing wellbore.

Petrophysical Analysis - Computational analysis of the rock and fluid properties of a geological formation using measurements of the physical properties of the rock, such as its natural radioactivity, its density, the passage of sound waves and the electrical and other physical responses to define amongst other things the nature of the pores within the rock and the types of fluids (water, oil or gas) which are present in those pore spaces.

mmbls - Million barrels of oil

NPV(10) - The present day value of the cumulative cash flows from a project using a 10% annual discount rate

Reservoir - are rock formations capable of containing fluids, namely oil, gas and water (brine). These fluids accumulate int he natural pores and fractures that exist in the reservoir rock. Typical reservoirs comprise sandstones or limestones (carbonates).