Egdon Resources has announced it is acquiring Aurora Production Limited.
The deal increases Egdon’s stake in two southern oilfield licences. It also adds an estimated 614,000 barrels to Egdon’s prospective resources, the company said.
The privately-owned Aurora Production has an 18.75% interest in the Egdon-operated Waddock Cross licence in Dorset (PL090) and 8.33% of the IGas-operated licence, PEDL070, which contains the Avington field in Hampshire.
If the conditional agreement is concluded, Egdon’s interest in the Waddock Cross field will rise from 55% to 73.5% and its stake in Avington will rise from 28% to 36.33%.
Both fields are currently shut in.
Modelling at Waddock Cross has estimated that a new horizontal well could yield 500-800 barrels of oil per day.
Avington was granted planning permission for continued operations, following an appeal in 2021. Egdon has previously referred to plans to redevelop the field in 2023. There are also longer-term plans for site water handling facilities.
Aurora Production’s owner, Aurora Petroleum Limited, has agreed to pay Egdon £288,000 for liabilities in the licences, including abandonment.
Egdon also said Aurora Production has accumulated ringfenced tax losses of about £90m, which should be available to offset tax on future profits.
Egdon’s managing director, Mark Abbott, said in a statement (20 December 2022):
“This acquisition builds on our existing interests in the shut-in Waddock Cross and Avington oil fields. Both assets have active plans in place to rejuvenate oil production.
“The acquisition therefore adds potential for near-term incremental production, adds to our resource base and delivers substantial tax losses that may be utilised to offset future taxes.”
The deal has to be approved by the industry regulator, the North Sea Transition Authority.
- The acquisition does not include Aurora Energy Resources Limited, which holds exploration licences in north west England and sought planning permission to drill and frack two wells at Altcar Moss, near Formby. That application was withdrawn in 2020 before it was considered by Lancashire County Council. Aurora Energy Resources’ latest accounts record a loan from Aurora Petroleum Limited, due to be paid by 31 December 2022. The two companies have offices at the same address in Aberdeen and share four officers.