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Egdon Resources seals Yorkshire offshore exploration partnership with Shell

Shell will drive a 3D seismic programme in 2021 and will then advance towards a well investment decision.

Egdon Resources Plc - Egdon Resources seals Yorkshire offshore exploration partnership with Shell

Egdon Resources Plc (LON:EDR) has sealed its proposed partnership with Royal Dutch Shell Plc (LON:RDSB) in the Resolution and Endeavour gas discoveries, off the North Yorkshire coast.

It comes after UK regulator Oil & Gas Authority (OGA) approved the transfer of a 70% interest in both assets to Shell, leaving Egdon with 30%.

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Shell is covering 85% of the costs in an upcoming 3D seismic programme, to survey both Resolution and Endeavour, which is slated to take place before the end of May 2021.

“We are delighted to have completed the transfer of interest and operatorship to Shell in respect of these important, and potentially valuable, licences for Egdon,” said Mark Abbott, Egdon managing director.

“The focus will now be on progressing appraisal activity on the Resolution and Endeavour gas discoveries.”

Abbott added: “We look forward to building on our good working relationship with Shell and benefiting from their substantial worldwide operational experience and expertise."

The farm-out agreement caps the total cost carry at the equivalent of US$5mln, thereafter Egdon would pick up 30% of the bill. Shell meanwhile also commits to pay for 100% of studies and manpower costs through to the anticipated well investment decisions, following the surveying.

A Schlumberger assessment of  the Resolution gas discovery, in 2019, estimated some 231bn cubic feet of contingent gas resources – with the P90 to P10 range set at 100bn to 389bn cubic feet – meanwhile the Endeavor ‘satellite’ discovery was estimated to have 18bn, with the range set at 10bn to 28bn.

Resolution was discovered originally by Total in 1966 and the pair of assets were acquired by Egdon in 2019’s 26th UK Seaward Licensing Round.

Quick facts: Egdon Resources PLC

Price: 1.8 GBX

AIM:EDR
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Market Cap: £5.91 m
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