Egdon to operate ‘robust’ Weaverthorpe

Egdon Resources plc will become operator of the onshore Weaverthorpe gas prospect after exercising a farm-in option and signing a further agreement for the North Yorkshire project.

LICENCES

The company has farmed-in on licence PL081 with York Energy (UK) Holdings Ltd and both companies have agreed for 100% of neighbouring PEDL347, also holding the prospect, with licensee Cuadrilla North Cleveland Ltd.

The result is a farm-in and “equalisation of interests of the two licences”, said Egdon. 

Weaverthorpe, a shallow Sherwood sandstone (Triassic) conventional prospect of 1,000 metres, is located immediately up-dip of interpreted gas pay in the Fordon-2 well which was drilled by BP in 1974.

Under the agreement for both licences Egdon will hold 52.5% of the project, Cuadrilla 25% and York 22.5%.

After recovering its costs of the farm-in, Egdon will assign a further 2.5% interest in both the licences to York.

The parties expect to complete an agreement within six weeks and a joint operating agreement covering the licences within a further six weeks. 

Egdon will pay 100% costs of planning, drilling, logging, and either short-term testing and completion or plugging and abandonment of a well to test Weaverthorpe within three years.

The company will pay the regulatory and “reasonable” legal costs associated with the transfer of the licence interests and operatorship, which is subject to regulatory approvals.

COMMERCIAL

Since signing the option six months ago, Egdon has reprocessed and interpreted 214km of 2D seismic data and completed further studies which have de-risked the project and confirmed a “material, commercially viable prospect”.

Managing director Mark Abbott said the company’s due diligence confirmed Weaverthorpe was a “robust and commercially attractive conventional gas prospect”. 

“This has triggered the exercise of the option on PL081 and an agreement with Cuadrilla in respect of PEDL347, which when concluded, will cover the entire prospect area and allow the optimal appraisal and development of Weaverthorpe on behalf of the new joint venture.

“Indigenous gas resource like Weaverthorpe provide local employment and generate taxes whilst having compelling environmental and security of supply benefits by reducing the UK’s increasing reliance on imports of LNG [liquefied natural gas] which carry significantly higher pre-combustion emissions. 

“Producing gas from Weaverthorpe would be fully aligned with the Government’s energy security strategy and net zero targets.”