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VSA Morning Flow Test, 29/07/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced that following a closed meeting by North Lincolnshire Council, held on 17 July 2019 it was decided that the council will withdraw its case in respect of the planning appeal for the Wressle Oil Field subject to the agreement of acceptable planning conditions. Consequently, the council will now not present evidence at the public inquiry which is due to commence on 5 November 2019, with the hearing expected to last up to six days and in front of a QC.

Whilst we view the decision of the Council not to present evidence as positive it remains that planning permission still needs obtaining at the appeal in November 2019. The company had, in our view, addressed the reasons highlighted for the prior refusal and this was confirmed by the fact that the latest application was recommended for approval by North Lincolnshire County Council's own planning officer in November 2018.

Although the significant delays surrounding the application process likely mean that investors have largely now discounted the upside potential from Wressle we continue to believe that a positive development decision would provide a significant catalyst for the shares given the net 125bopd would have a significant positive impact on EDR’s near term earnings outlook.

We reiterate our Buy recommendation and 39p target price.

 

 

 

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