In a statement, Egdon gave the details of a deal to acquire 12% of the unconventional resources exploration rights for the PEDL 209 acreage from Stelinmatvic Industries. In exchange for the stake unconventional rights the company is trading 12% of conventional rights to the same acreage (and 580,646 shares).
It leaves Egdon with 35% of the conventional rights to PEDL 209 and 72% of the unconventional rights.
Egdon told investors it has also expanded an opt-in arrangement with Total, giving the French major the opportunity to take a stake in the unconventional rights.
Total can pick up half of Egdon’s interest in the project by covering the explorer’s share of exploration costs up to £13.47mln.
"We are pleased to increase our interest in the unconventional resources prospectivity of PEDL209 and secure a new opt-in agreement with Total, which would fully carry our increased interest in the licence if exercised,” said managing director Mark Abbott.
PEDL 209 is located in the Gainsborough Trough and it neighbours the PEDL140 acreage, hosting the Springs Road site where IGas Energy last year landed planning permission for exploration drilling from Nottinghamshire County Council.
Abbott added: “we look forward to being carried on potentially play-opening wells in the Gainsborough Trough, our core area for unconventional resources exploration.
“We continue to believe that indigenous onshore gas could be a major contributor to the UK's future energy mix."
Cantor Fitzgerald described the new arrangements as “two very important transactions” and highlighted that Egdon has not only increased its exposure to unconventional resources it has also potentially reduced its financial exposure to future drilling costs.