Egdon Resources plc (AIM:EDR) has sealed the farm-in agreement with Shell in respect of offshore North Sea licences P1929 and P2304 containing the Resolution and Endeavour gas discoveries.
The Oil and Gas Authority (OGA) approved the transfer of a 70% interest and operatorship in both licences, and Egdon retains a 30% interest in the licences.
Associated documentation including Joint Operating Agreements has also been completed.
Under the terms of the farm-in, Shell will pay 85% of the costs of the acquisition and processing of the 3D seismic survey covering both the Resolution and Endeavour gas discoveries.
The work must be completed by 31 May 2021.
A company statement read: “The carry on the acquisition costs will be capped at US$5 million gross, beyond which Egdon would pay 30% of the survey costs.
“Furthermore, Shell will also pay 100% of all studies and manpower costs through to the well investment decision on the licences.”
Egdon’s managing director, Mark Abbott, added that the focus would be on progressing appraisal of the Resolution and Endeavour gas discoveries.
“The first part of this activity will be the acquisition of a marine 3D seismic survey during Q1 2021.
“We look forward to building on our good working relationship with Shell and benefiting from their substantial worldwide operational experience and expertise.”