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Egdon resources reports first gas at Kirkleatham field

Published: 10:15 27 Apr 2011 BST

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Egdon Resources (LON:EDR) has achieved first gas flows at the Kirkleatham gas development at the PEDL068 license in the UK, where it holds a 40 percent operated interest.

The company expects to ramp up the flow rates to the maximum of about 5 million cubic feet of gas per day. Gas flow rates will be restricted during the early stages of production from the field as as system performance and gas quality is monitored.

"Having achieved the milestone of first gas at Kirkleatham, we now look forward to achieving optimum production rates in the coming weeks.

"The presence in Keddington-4 of a significant section of Unit 1 reservoir up-dip of the Keddington-1Z well is encouraging and we look forward to the results of production from this well during early May,” said managing director of Egdon Mark Abbott.

The joint venture partners are Sterling Resources, which holds a 47 percent interest, Yorkshire Exploration Limited with an 8 percent stake and Montrose Industries Limited, which holds 5 percent.

The gas from Kirkleatham is sold to Sembcorp Utilities, which operates the Wilton site for use in its GT2 gas turbine power plant.

Egdon has also completed drilling operations at Keddington-4 in Lincolnshire licence PEDL005, where it has a 75 percent operated interest, penetrating 120 metres of the primary reservoir Unit 1 sandstone with high gas readings indicative of the presence of oil.

The well will not be deepened due to borehole stability concerns. Keddington-4 will be put into production once the drilling rig has demobilised from the site later this week.

The well is a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, which was drilled by Candecca Resources in 1998.

Production from the adjacent Keddington-3z well, which has been suspended for safety reasons during the drilling operations, will resume once Keddington-4 has been tested.

Investors welcomed the news, sending shares in Egdon up 2.5 percent.

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