Egdon Resources (LON:EDR)
Egdon Resources (EDR LN) has provided an update following the announcement by Europa Oil & Gas (LON:EOG) that it intends to withdraw its planning application to drill the Holmwood prospect from the Bury Hill Wood Site. The lease is due to expire on the 18th September 2018 and the Minister for the Environment, Food and Rural Affairs has decided not to renew the lease. However, the PEDL 143 license has recently been extended to 30th September 2020 and EOG will now consider alternative sites from which to target the Holmwood prospect.
Whilst the site is being re-evaluated for testing we withdraw Holmwood from our valuation, which on a risked basis contributed just 0.4p/sh. indicating a lower target price of 51.6p with the valuation continuing to be dominated by EDR’s shale acreage.
We reiterate our Buy recommendation although reduce our target price by 1% to 51.6p/sh.