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Egdon Resources picks up new midlands gas project

“This acquisition is consistent with our strategy of enhancing Egdon's position in core areas where we see significant oil and gas potential," the company said

Onshore oil drilling
The new assets include a 'tight' gas discovery from the 1980s

Egdon Resources Plc (LON:EDR) and IGas Plc (LON:IGAS) are adding to their positions in England’s east Midlands area.

The companies are each picking up 50% of PEDL 278 which includes the Kirk Smeaton tight gas discovery, as well as other conventional and unconventional prospectivity.

Egdon told investors that the deal sees the partners taking the assets from Celtique Energie and Investcan Ltd for a nominal cash consideration. The deal has already been approved by regulator, the Oil & Gas Authority.

WATCH: Zak Mir on Egdon Resources

Mark Abbott, Egdon managing director, said: “We are pleased to acquire a material holding in a licence containing the 1985 Kirk Smeaton tight gas discovery and further prospectivity at minimal cost.

“This acquisition is consistent with our strategy of enhancing Egdon's position in core areas where we see significant oil and gas potential."

In late morning trading, Egdon shares were 1.6%, or 0.12p lower at 7.88p.

In a note to clients, analysts at broker VSA Capital repeated a ‘buy’ rating and 34p price target on Egdon.

They said: “This acquisition is in-keeping with EDR’s strategy within its core area. We now await further update on the development and exploration programme on this licence from EDR and IGAS.”

 -- Adds video link, broker comment, share price --

Quick facts: Egdon Resources Plc

Price: 1.9 GBX

AIM:EDR
Market: AIM
Market Cap: £6.24 m
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