The oil and gas operator, Egdon Resources, has reported increased revenues of more than 530% because of rising production and prices.
In accounts for the year ending 31 July 2022, the company said net production rose 160% to 84,894 barrels of oil equivalent, compared with 32,686 boe in the previous year.
Oil and gas revenues rose to £6.91m, up from £1.09m for the previous year.
Production was mostly from the Wressle onshore oilfield in North Lincolnshire, where Egdon has a 30% stake, and the offshore Ceres gas field, Egdon said.
The company said average daily production from the Ashover Grift at Wressle was 656 barrels of oil per day (bopd).
Production resumed from the Wressle well on 19 August 2021 after the proppant squeeze, Egdon said. It reported that cumulative gross production from January 2021 to end of July 2022 exceeded 225,000 barrels of oil, with no formation water.
Formal onshore production data from the North Sea Transition Authority has not included Wressle, up to July 2022.
Egdon said current production at Wressle was limited by the environmental permit to 700-725 bopd. But the company said it was making progress on a scheme to use gas produced at Wressle, which would allow the oil production limit to be lifted.
Egdon said it planned to install a microturbine to replace a diesel generator, likely to be by the end of the year. It also planned to install a gas engine to generate and export up to 1.75MW of electricity into a private power network.
Egdon said it was reprocessing 3D seismic data to inform the final location of new development wells to target the other target formation, the Penistone Flags, at Wressle.
Chairman, Philip Stephens, said:
“The highlight of the year has clearly been the outstanding production and financial performance of the Wressle oil field. The year has seen the positive impact of Wressle combined with high oil and gas prices which along with production from our existing fields has translated into a robust financial performance for the Company.”
Egdon, one of the four big shale gas licence-holders, welcomed Liz Truss’s lifting of the moratorium on fracking in England in September 2022.
The reinstatement of the moratorium by Rishi Sunak, on 26 October, saw Egdon’s shares fall more than 13%.
The company holds 151,742 net acres (614km2 net) of shale gas licence, with an estimated 37.6 trillion cubic feet of gas in place, it said.
Mark Abbott, Egdon’s managing director, said:
“This remains a significant and potentially highly valuable position.”
The company’s core shale gas area is the Gainsborough Trough of Nottinghamshire, Lincolnshire and Yorkshire, where it holds 71,361 net acres. It also has interests in the Widmerpool Basin and Humber Basins of the East Midlands, Cleveland Basin in north east England and the Blacon Basin in north west England
Chairman Philip Stephens said Egdon remained:
“well positioned to be at the forefront of any development of shale gas given its enviable acreage position in the Gainsborough Trough and other shale basins”
Updates from other sites
Biscathorpe (Egdon 35.8%): Appeal hearing held on 11 October 2022 on the refusal of Egdon’s application for a sidetrack and long-term production. Decision expected in early 2023.
North Kelsey (Egdon 50%): Appeal documents submitted against refusal of planning application for a time extension at this undeveloped site. Decision expected in early 2023.
Keddington (45%): Drilling location identified in the east of the field targeting up to 183,000 barrels. Planning permission is in place and drilling is expected in the second half of 2023, the company said. The field is currently producing at a net rate to Egdon of 15 bopd. The Keddington site will also target the Louth Prospect with estimated resource of 600,000 barrels of oil.
Fiskerton Airfield (Egdon 80%): Currently shut-in awaiting a workover programme. Longer-term potential for the site to be used to managed produced water from other Egdon sites through the existing injection well, the company said.
Kirkleatham (Egdon 68%): Remains shut-in. Potential for a sidetrack to access gas. Discussions underway for a potential farm-out of a geophysical programme and sidetrack.
Waddock Cross (Egdon 55%): Currently shut-in. Modelling suggests a new horizontal well could produce 500-800 bopd. Planning consent in place.
Avington (Egdon 28%): Remains shut-in. Planning permission on appeal granted to the operator, IGas. Plans to redevelop the field include establishing water-handling facilities.
Cloughton (Egdon 40%): Egdon assumed operatorship of PEDL343 from Third Energy, increasing its interest to 40% and securing an extension to the initial term until 2024.
Dukes Wood: plans to plug and abandon Dukes Wood-1 oil well and recomplete it for geothermal heat production submitted to regulators.
PEDL209, Laughton/Gainsborough: Egdon increasing its interest to 100% with withdrawal of partners
PEDL202, north Nottinghamshire: Relinquished August 2021
PEDL130, north Nottinghamshire: Relinquished July 2022
Oil and gas revenues: £6.91m (2021: (£1.09m)
Earnings before interest, tax, depreciation, amortisation, asset impairments, impairment reversals and write-downs: £4.67m (2021: £0.72m loss)
Gross profit: £3.368m (2021: £0.682m loss)
Profit for the year: £3.30m (2021: £1.68m loss)
Taxation: £0.89m (2021: £0.00)
Net production: 84,894 boe, 233 boepd (2021 32,686, 90 boepd)
Total current assets: £7.502m (£3.044m)
Total non-current assets: £30.534m (2021: £30.963m)
Cash and cash equivalents at end of year: £4.795m (2021: £1.959m)
Revenues for August-October 2022: £2.07m
Licence interests: 36 (2021: 38)
Profit being made due to Wressle, maybe more to come. Wonder how many years it will take for such profits to compensate, via local funding, for the £400k cost to the local community by the failed attempt to stop it happening in the first place.
Transfer of production to a local source is the reality statement within the final findings that cost £400k. I could have provided that gem at zero cost.
Profit for the year: £3.30m (2021: £1.68m loss)
Many years of losses before that, including £4.57m loss in 2020. Many seem not to want them to make a profit ever, want to stop investment and consumption. Very good. The oil business will go elsewhere. It’ll only stop when we stop consuming the stuff.