The operator of the UK’s newest producing onshore oil site, is considering a gas prospect in North Yorkshire.
Source: UK Onshore Geophysical Library
Egdon Resources announced today it had signed an option agreement for the onshore production licence PL081, which includes the Weaverthorpe gas prospect.
Under the agreement with York Energy (UK) Holdings Limited, Egdon has six months to elect to farm into the licence.
During the option period, Egdon said it had committed to additional technical and operational work, including reprocessing 2D seismic data.
Egdon is to pay £100,000 to York Energy, less any licence fees for 2023.
If it exercises the option, Egdon will get a 70% stake in the licence and become the operator.
Egdon will pay all the costs of planning, drilling and logging a well to test the Weaverthorpe Prospect. It will also pay all the costs of either testing and completing the well or plugging and abandonment.
The Weaverthorpe prospect has an estimated gas resource of 58 billion cubic feet, Egdon said.
Its managing director, Mark Abbott, said;
“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.
“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 has an agreement with the current operator of PL081, Third Energy UK Gas Limited. This entitles York Energy to be assigned the entire legal and beneficial interest in PL081.
Egdon said it would pay all the costs associated with transferring the licence from Third Energy to York Energy and then to Egdon Resources.
Egdon has interests in 35 UK licences, including the Wressle oil site in North Lincolnshire, which began production in July 2022. Egdon shares fell 1.72% to 2.85p.
DRILL OR DROP? 
How much carbon will this send into the atmosphere?
Less than that from the gas being imported, Philippa. So, you are a yes, then?
But interesting you should raise that when it is the oil and gas companies who are getting geared up to capture carbon and store it in the N.Sea. Probably to be labelled as greenwashing, but millions of tonnes scheduled to be captured. If such companies do not earn money how would they fund such activities? Oh yes, the taxpayer!
https://thebulletin.org/2022/09/plagued-by-failures-carbon-capture-is-no-climate-solution/
Good way to invest some of that £400k costs that the antis transferred from the locals to Egdon. Success breeds success? Newest on shore oil site to be followed by newest on shore gas site? Time will tell.
The new Department of Energy is charged with “securing more home grown energy that is clean and affordable”. The PM said this was “mission-critical” for his government, charging Shapps with “securing more home grown energy that is clean and affordable, as fast as possible”.
Surely this has to mean supporting projects like Egdon’s which could produce gas with a lower carbon footprint than imported sources. There is a view amongst energy policy experts that energy policy considerations across Europe have increased the weight given to energy security. It’s worth noting of course that it was, in large part, American exports of fracked gas (and a mildish winter) that saved Europe after Putin’s gas cut offs.
As I’ve said here before I don’t think fracking will be embraced by either the Tories or Labour until the energy emergency breaks through into public awareness as much as climate.
Clean? Gas is a climate destroying fossil fuel. Cheaper, it will be sold at market price. Will they extract commercially viable quantities of gas? Third Energy always maintained their mature gas fields were now depleted of conventional gas, so only time will tell.
What happened to Third Energy, KatT? They had some commercial gas in their area and extracted it. Meanwhile, Angus are extracting commercially viable quantities of gas, on shore UK.
What market price, KatT? The $7 one or the $47 one-see my previous comments if you don’t understand that- but market price is not singular and even when market price is determined locally then the price to the consumer is determined by taxation and the redirection of that tax, eg. windfall taxation. Even the BBC yesterday-at last-are aware that local taxation is made upon local activity, when they were discussing BP results. Took them long enough, wonder how long that will take to filter down to this forum? Goodness, perhaps some political parties would then follow when discussing non doms and separate from piracy?
I do agree with you on time will tell. Apart from gas reserves that would require fracking, it is unlikely there will be many pockets of gas, or oil, on shore UK left to find, but as in the period around 2014, when prices are high, or supply is insecure, then all possibilities will be examined again. Good for Egdon taking the commercial risk and interesting they do it during a week that coal is on standby in UK, as high pressure means little wind! Shock/horror now there is a “scientific” discovery. I’m surprised the ancient mariners didn’t pass that on.
Hopefully, Egdon could get into production a bit quicker than a new nuclear power station, to provide the back up for unreliable wind-and much cheaper. I would have thought the windy lot would welcome such moves, otherwise there is no point to having more turbines when the more turbines suffer from the same high pressure. “Can’t have any more until the new nukes are built” might not go down too well.
What happened to Third Energy, Martin ? By the time its conventional reserve was extracted, it had debts of £ 75 million. That was the roaring success of Third Energy. Barclays Bank finally freed itself of its Prodigal Son by sending it away with a Postal Order to spend at the tuck shop.
Third Energy has since emerged from rehab with a trimmer figure and is now engaged in developing a business based on renewables. A far cry from its previous twenty years of trading in gas when it never made a profit.
Yes, Philip, Third Energy made a loss out of gas. Maybe it will make a loss out of renewables. Maybe it won’t. The banks made a loss out of banking around 2010! (Losses are not always a problem for a holding company, by the way. Sometimes they are very useful.)
What was the price of gas when Third Energy made a loss, compared to current and likely future price Philip?
I repeat: “as in the period around 2014, when prices are high, or supply is insecure, then all possibilities will be examined again.” Egdon have decided that is the case and I am sure others will do the same, whether oil/gas or renewables. Some will win, some will lose-and renewables are not immune to that. The world’s largest wind turbine manufacturer is a current roaring success! Hope Barclays are not their bankers.
Maybe not liked by everyone but transition towards Net Zero includes that gas is required, and Ukraine situation with sanctions upon Russian gas and oil modifies what may be profitable in the future compared to the past.
Ironically, I remember back to a time when oil was expensive, and many pools of oil in UK were re-examined to see if they may have become commercial. My dentist had one under her house. Nothing then happened, as USA cranked up fracking, OPEC tried to stop them by discounting price, the world oil price dropped and the UK pools were no longer commercial! Plus, Scottish independence suddenly had the oil price rug pulled. Funny old world.