Egdon Resources plc has signed an option agreement for onshore production licence PL081 containing the Weaverthorpe gas prospect in North Yorkshire.
WEAVERTHORPE
The company’s agreed the option with York Energy (UK) Holdings Ltd for six months beginning 3 February 2023.
Egdon said that the Weaverthorpe was a relatively shallow Bunter Sandstone (Triassic) prospect located immediately up-dip of interpreted gas pay in the Fordon-2 well which bp drilled in 1974.
The company added its initial evaluation indicated an estimated mean prospective gas resource of 58 billion cubic feet.
During the six-month option period, Egdon will conduct additional technical and operational work to de-risk the prospect.
This includes reprocessing the vintage 2D seismic data and integrating it with the existing 3D seismic data which defines the western part of the prospect.
TERMS
The terms of the deal includes Egdon paying 100% of the 2023 licence fees.
If Egdon exercise the option, it will earn a 70% interest in the licence and assume operatorship.
The company will also 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.
Egdon will also pay York £100,000 in cash, less any licence fees that were paid by Egdon for 2023.
York has an agreement with the current operator, Third Energy UK Gas Ltd, entitling it to be assigned the entire legal and beneficial interest in PL081.
Egdon will pay 100% of the costs associated with the transfer of the licence from Third Energy to York and to Egdon, subject to regulatory approval.
SIGNIFICANT
“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,” said managing director Mark Abbott.
“The deal structure secures the opportunity at low cost whilst we undertake additional technical due diligence through the application of modern seismic processing technology.”
YORK ENERGY
Egdon noted that York Energy (UK) Holdings Ltd is part of the Alpha Energy group and an affiliate of Alpha Oil & Gas LLC, an operator of assets in the United States.
York currently has rights to 100% interest in the PL081 licence in the UK and 100% interest in the Ichnyanska production sharing agreement in Ukraine from a 500,000+ acre area in Ukraine.