Egdon Resources plc recorded an increase of 500% in overall profits from its onshore oil and gas operations in the East Midlands.
OPERATIONS
The company’s unaudited results for the six months ended 31 January 2022 show production increased by 116% to 36,714 barrels of oil equivalent (boe) equating to 200 boe per day (boepd) (H1 2021: 16,928 boe and 92 boepd).
Production at the Wressle joint venture exceeded Egdon’s expectations of 500 barrels of oil per day (bopd) and is currently producing at permit constrained rates of 760-800 bopd.
The company assumed operatorship, increased its equity to 40% and agreed an extension to 20 March 2024 in PEDL343 which contains the Cloughton gas discovery.
The company was refused planning permission to drill a side-track well, testing and long-term production at Biscathorpe in Sussex, but has since appealed against the decision.
FINANCES
Oil and gas revenues increased by 500% during the period to £2.551m (H1 2021: £0.424m) as a result of increased production and strong commodity prices.
Profit before impairments/write backs were £0.715m (H1 2021: loss of £0.763m)
Overall profit for the period was £1.222m including £0.507m write-back (H1 2021: loss of £1.039m including £0.276m of impairments)
Cash and cash equivalents of £2.084m (H1 2021: £2.422m and 31 July 2021: £1.96m).
Net current assets as at 31 January 2022 were of £1.165m.
This includes Union Jack Oil debt of £1.07m and £0.417m deferred consideration for Wressle (31 January 2021: net current liability of £0.126m, including liability for £0.962m convertible loan and £0.417m deferred consideration for Wressle).
OUTLOOK
Egdon said that post-period end production and revenues continued to be strong with February and March revenues of £0.480m and £0.953m respectively.
The company is funded for all near-term committed activity including the loan repayment of £1.07 million due in May 2022
Egdon’s key operational focus will be on Wressle, progressing drilling plans at Keddington oil field and the field redevelopment at Waddock Cross, and securing approval for Biscathorpe and the North Kelsey projects.
The company will also maintain its “substantial acreage position in the nascent shale-gas play portfolio”.