VSA Morning Flow Test, 08/09/20
Egdon Resources (LON:EDR)
Egdon Resources (LON:EDR) has announced that the existing planning permission to drill a conventional exploratory oil well at North Kelsey-1 site location was approved by Lincolnshire County Council Planning Committee for extension to 31 December 2021. The approval relates to PEDL241. The Prospect where EDR is the operator, is well defined on 3D seismic data and has the potential for up to four stacked conventional reservoir intervals in the Chatsworth, Beacon Hill, Ravensthorpe and Santon sandstones with mean gross prospective resources of 6.5mmbo. Drilling was delayed due to COVID-19, although EDR will now look to commence drilling during 2021. The asset, which is an analogue of the soon to be in production Wressle development, currently has a target value of 3.5p/sh. in our model with drilling a key catalyst for derisking and realising that value potential.
We reiterate our target price of 35.2p/sh. and Buy recommendation.
Oliver O'Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: oodonnell@vsacapital.com
Samuel Green, Equity Analyst | T: +44 (0)20 3005 5010 | E: sgreen@vsacapital.com
#Indicates VSA house stock.
All disclosures and supporting charts can be found in the PDF version.
VSA Capital Research | T: +44 (0)20 3005 5000 | E: research@vsacapital.com
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