Egdon Resources has announced plans for seven new oil and gas wells over the next year. Four of the wells are in Lincolnshire and have planning permission. Another, near Dorking in Surrey, also has approval after the company’s partner, Europa, won a planning appeal.
According to Egdon and its partners, at least four of the wells are conventional and will not involve fracking. The company says a well in which it has an interest at Misson, Nottinghamshire, could become the first in the Gainsborough Trough to explore for an unconventional resource.
Egdon also plans to develop the Wressle-1 well near Scunthorpe for oil production. And it wants to drill a well from the North Yorkshire coast under the seabed to target an offshore prospect. Both these projects, like the well at Misson, need planning permission. (See Drilling plans below for more detail)
Falls in production and revenue
The details were released this morning in the company’s annual financial results. In the 12 months from July 2014 to July 2015 Egdon saw a 27% fall in oil production from its sites and a 30% fall in revenue. Losses over the period rose from £0.46m in the previous accounts to £4.47m. (See key figures below for more details)
Despite this, Egdon’s chairman, Philip Stephens, said the company’s conventional exploration portfolio had “significant potential for growth”. And he seemed optimistic about shale gas exploration. He said:
“We have confidence that the investment case for unconventional resource exploration in the UK remains strong.”
He welcomed the passage of the Infrastructure Act which, he said, had removed “considerable regulatory uncertainty regarding sub-surface access for directional and horizontal drilling”. And he said the election of a majority Conservative government “unambiguously committed to shale exploration is a positive development.”
Egdon was offered seven blocks in the first tranche of licences issued under the 14th round. It applied for “a number of additional blocks” covered by the second tranche which have yet to be confirmed. The company said it had interests in 33 licence areas and its unconventional acreage is now 160,000 acres.
Lincolnshire: Drilling of Laughton-1 exploration well in PEDL209 between Gainsborough and Scunthorpe. It will target a structural trap at 1,500m+ with what Egdon describes as “multiple conventional Carboniferous sandstone reservoir targets”. The company’s Best Estimate Prospective Resources is 1.3m barrels of oil. Egdon has said no fracking is planned.
Lincolnshire: Field Development Plan to be submitted to the Oil and Gas Authority for production from Wressle-1 exploration well east of Scunthorpe in PEDL180.
First quarter of 2016
Lincolnshire: Drilling of appraisal development well, Keddington-5, a sidetrack to Keddington-4. Planning consent in place. Farm-outs agreed with Terrain Energy Ltd and Union Jack Oil plc.
First half of 2016
Lincolnshire: Drilling of Biscathorpe-2 exploration well in PEDL253 west of Louth. Planning permission awarded in March 2015. Egdon’s share of well costs are 45.6%. Egdon has said no fracking is planned.
Lincolnshire: Drilling scheduled for North Kelsey-1 exploration well, in PEDL241, 10 miles south of Wressle-1 well. Planning permission granted December 2014. Egdon has said no fracking is planned.
Nottinghamshire: Drilling scheduled for Springs Road-1, Misson, Bassetlaw, subject to planning permission and consents. Egdon described this as “a key well” because it would be the first unconventional resource exploration well in the Gainsborough Trough. Egdon said the well would “provide important information towards de-risking and evaluating the unconventional resource potential of our acreage”. The operator, IGas, has applied for planning permission which does not include fracking.
Second half 2016
Lincolnshire: Commercial production of oil from Wressle-1 well scheduled to begin, subject to permissions and consents.
North Yorkshire coast: Onshore-to-offshore well in the ‘A Prospect’ of offshore licence area P.1929, off the North Yorkshire coast. Dependent on planning permission and consents. Best Estimate Contingent Resources of 160billion cubic feet. Egdon said: “We expect to submit a planning application following the second tranche of 14th Round offers.”
Late 2016 or 2017
Surrey: Drilling scheduled for Holmwood-1 (Bury Hill Wood) exploration well in PEDL143, near Dorking. Egdon is carried on drilling costs for its 18.4% interest by UKOG. Planning permission granted August 2015 after a successful appeal
Egdon said it also had plans for potential wells at unnamed sites in Dorset and a plan for commercial production at Waddock Cross, also in Dorset, which is currently shut in because of low oil prices.
Updated: 4/11/15 to correct costs of drilling at Holmwood-1 and, based on additional information from Egdon to move Biscathorpe-2 drilling to First half 2016.