Egdon Resources plc (LON:EDR), an established UK focused energy company, has announced its unaudited results for the six months ended 31 January 2023.
Overview and Highlights
Operational and Corporate
· Production for the Period was up by 27% to 46,465 barrels of oil equivalent (“boe”) equating to a rate of 253 boe per day (“boepd”), ahead of guidance of 225-245 boepd (H1 2022: 36,714 boe and 200 boepd)
· The Wressle oil field continued to be the standout asset for Egdon, producing at an average rate of 689 barrels of oil per day (“bopd”) during the Period. Total field production from Wressle to 31 January 2023 stood at 357,838 barrels of oil with no water production.
· The North Kelsey Planning appeal documentation was submitted on 8 August 2022. This will be heard via a Public Hearing on 14 June 2023
· During 2022, the moratorium on hydraulic fracturing for shale gas was lifted (8 September 2022) and then reinstated (27 October 2022)
· A hearing was held on 11 October 2022 in relation to the Biscathorpe planning appeal and we continue to await the Planning Inspector’s decision
· Licence P2304 was relinquished as planned in November 2022
· In December 2022 Egdon announced the acquisition of Aurora Production (UK) Limited, a private company with interests in PL090 (Waddock Cross) and PEDL070 (Avington). The effective date of the transaction is 30 September 2022 and the consideration is the grant of a Net Profit Interest capped at the cash balance of £0.288 million which provides for outstanding abandonment liabilities. This transaction completed post period end on 1 March 2023.
Financial Performance
· Unaudited revenue for the Interim Period was up 46% to £3.725 million (H1 2022: £2.551 million)
· Earnings before interest, tax, depreciation, amortisation, asset impairments, impairment reversals and write-downs were £2.105 million (H1 2022: £1.410 million).
· Overall profit for the Period after a tax charge of £0.741 million (H1 2022: £Nil) was £0.435 million (H1 2022: £1.222 million)
· As at 31 January 2023, the Company had cash and cash equivalents of £5.524 million (H1 2022: £2.084 million) and net current assets of £6.593 million (H1 2022: £1.165 million, which includes debt of £1.007 million and £0.417 million deferred consideration for Wressle)
· The Company had no borrowings as at 31 January 2023 (H1 2022: £1.007 million)
Subsequent Events
· On 6 February 2023 Egdon entered into a Farmout Option Agreement with York Energy (UK) Holdings Limited relating to Licence PL081 in North Yorkshire. Under the terms of the Agreement, Egdon has a period of six months from 3 February 2023 to elect to farm into the Licence which contains the Weaverthorpe Prospect. Egdon’s initial evaluation indicates an estimated Mean prospective gas resource of 58 billion cubic feet.
· On 1 March 2023 Egdon completed the acquisition of Aurora Production (UK) Limited which has subsequently been renamed Egdon Resources (Aurora) Limited. The effective date of this transaction is 30 September 2022.
· On 19 April 2023 Egdon relinquished P1929 which contained the Resolution gas discovery and which was fully impaired in the 31 July 2022 accounts.
Outlook
· Post-Period end production and revenues have continued to be strong, despite reduced commodity prices, with February and March unaudited revenues of £0.632 million and £0.521 million respectively.
· Production guidance for the full financial year is increased to 240-250 boepd, up from 225-245 boepd.
The key operational focus for the remainder of 2023 will be:
· Maintaining and enhancing the impressive production performance at Wressle whilst progressing both the gas monetisation and further development drilling as priorities.
· To add reserves, production and revenues through the drill-bit across our exploration and development/re-development projects.
· To progress the Company’s energy transition strategy through geothermal, energy storage, hydrogen and renewable generation projects.
Commenting on the results, Philip Stephens, Chairman of Egdon said;
“This has been another period of impressive operational and financial performance for the Company. Egdon’s flagship asset, Wressle, continues to perform strongly, generating positive cash flow and with plans being progressed for its further development.
We were pleased to further enhance the business through the acquisition of Aurora and the addition of an option on a material gas prospect at Weaverthorpe.
The outlook for the remainder of the year looks positive with expected continued strong revenue generation from Wressle alongside numerous value catalysts in the planned work programme.
We look forward to updating on progress through the second half of the year.”
