Interim Results for the six months to 31 January 2018 - Egdon Resources plc - "Positioned for an active 2018"
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Egdon Resources plc
Interim Results
for the six months to
31 January 2018
“Positioned for an active 2018”
Photo: Fiskerton Airfield Workovers
Slide 1 Interim Results Presentation April 2018
Egdon at a Glance – Summary
Operated Best Estimate 2P Reserves Production **
UK Licences
Licences Resources
43 29 697 0.76 98
mmboe mmboe boepd
Unconventional Prospective Net Cash* Shares in Issue
GIIP Unconventional
51 205,000 4.1 c. 260
TCF acres £ million million
mmboe = millions of barrels of oil equivalent
boepd = barrels of oil equivalent per day
GIIP = Gas Initial In Place * At 31 January 2018
TCF = trillions of cubic feet of gas ** Six months to 31 January 2018
Slide 2 Interim Results Presentation April 2018
Operational and Corporate Highlights
• Commencement of site construction at Springs Road with drilling to commence during 2018
• Rejection of Egdon’s planning appeals for development of the Wressle - Egdon to submit new
application to address reasons for refusal and extend existing planning
• Acquisition of Promote Licence P2304 expanding core area offshore North Yorkshire
• Acquisition of producing Fiskerton Airfield oil field and sale of 20% interest to Union Jack Oil
• Production of 17,962 boe - 98 boepd (H1 2017: 16,882 boe; 94 boepd)
Slide 3 Interim Results Presentation April 2018
Financial Highlights
• Oil and gas revenues £0.51 million (H1 2017: £0.51 million)
• Loss of £0.85 million (H1 2017: loss of £0.73 million)
• Cash at bank of £4.10 million (H1 2017: £6.80 million)
• Net current assets* of £5.08 million (H1 2018: £8.00 million)
• The Company has no debt (H1 2016: Nil)
Summary Statement of Comprehensive Income Unaudited six Unaudited six
Audited year Summary Statement of Financial Position Unaudited 31- Unaudited 31- Audited year
months ended months ended
ended 31-July-17 Jan-18 Jan-17 ended 31-July-17
31-Jan-18 31-Jan-17
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 513 505 1,039 Non Current Assets
Cost of sales - 845 - 646 -1,576 Intangible assets 19,856 18,923 19,231
Gross Profit/(Loss) -332 -141 -537 Property, Plant & equipment 9,130 8,536 9,264
Admin Expenses and other operating income -493 -570 -1,120 Total non-Current Assets 28,986 27,459 28,495
Operating Loss -825 -711 -1,657 Current Assets
Financing costs and income -20 -23 -42 Trade and other receivables 1,808 1,795 1,507
Profit/(loss) before taxation -845 -734 -1,699 Cash & cash equivalents 4,095 6,796 6,057
Taxation 0 0 0 Available for sale financial instruments 50 50 50
Total Comprehensive Income for the period -845 -734 -1,699 Total Current Assets 5,953 8,641 7,613
Basic Earnings/(loss) per share (0.33p) (0.31p) (0.68p) Current Liabilities -878 -642 -1,216
Net Current Assets 5,075 7,999 6,397
Total Assets less current liabilities 34,061 35,458 34,892
Non-Current Liabilities
Provisions -2,201 -1,842 -2,187
Net Assets 31,860 33,616 32,705
* As at 31 January 2018
Slide 4 Interim Results Presentation April 2018
Post-Period Update
• Farm-out of PEDL253 (Biscathorpe) to Union Jack Oil plc and Humber Oil & Gas Limited
• Workovers completed at Fiskerton Airfield - production increased to approaching 30 bopd
• Planning application submitted 13 April 2018 to extend existing consent at Wressle for 12 months*
• investigation boreholes and two deeper cored boreholes completed to support a new planning
application for Wressle field development due for submission within the next month
• Planning applications submitted to extend consents at North Kelsey and Biscathorpe
• Encouraging results from third party activity includes the drilling of UK’s first horizontal shale gas
well
* From date of planning decision
Slide 5 Interim Results Presentation April 2018
Strategy Progress
Three key near-term strategic objectives to
Status/Progress
deliver shareholder value
UK growing the Company’s • Achieved significant increase in acreage
Unconventional exposure to unconventional and GIIP since 2014
Resources resource exploration • Drilling at Springs Road - 2018
opportunities in Northern • Significant additional sector activity
England progressing
Conventional adding additional • Drilling planned at Biscathorpe*
Resources reserves/revenues through an Holmwood*, and North Kelsey*/** in 2018
Exploration and active drilling programme whilst • Acquired offset acreage to Resolution gas
Appraisal managing risk and financial discovery offshore Yorkshire
exposure through farm-out
Production a continued focus on • Acquired Fiskerton Airfield oil field and
maximising production rates, worked over wells
revenues and profitability from • New Application nearing submission for
existing producing assets Wressle development
through targeted investment • Ceres well production restart H2 2018
* Subject to final regulatory approvals
** Subject to further farm-out
Slide 6 Interim Results Presentation April 2018
Unconventional Resources – Strategy, Assets & Performance
Strategy: grow the Company’s exposure to unconventional resource exploration opportunities in
Northern England
• Delivered significant growth in acreage and GIIP since 2014
• 2018 = drilling of Springs Road-1, a key well in Egdon’s core area (Gainsborough Trough), plus
important wells and tests by others
• Potential for significant share price impact as plays are de-risked and value/acre increases
Potential Valuation
(Trillion Cubic Feet (“TCF”)) (Thousands of Acres ) (pence per share)
Egdon acquisition costs Typical UK Farm-in Deal range
180% increase 270% increase
Valuation per share based on net acreage of 205,000 acres and 259,984,822 shares in issue and
* ERC Equipoise Ltd - 13 May 2014 & 1 November 2016, corrected for recent deals exchange rate of 1.3 $/£
Slide 7 Interim Results Presentation April 2018
Unconventional Resources - East Midlands
• 160,094 net acres in the East Midlands with
shale/tight gas potential
• Gainsborough Trough = core area
• Third largest net acreage holder in the
Gainsborough Trough play
• Broad distribution = exposure to potential sweet
spots
Slide 8 Interim Results Presentation April 2018
Springs Road – Play-Opening Well
Springs Road-1 • Site construction nearly completed
(Egdon 14.5%) • Vertical exploration well (approx. 3,500m) expected drilling H2 2018
• Objectives:
• Explore the Upper Bowland-Hodder and deeper Lower Bowland-Hodder
Explore Carboniferous tight sandstones
• Determine the landing depth for the Springs Road-2 lateral
• Egdon’s costs carried by INEOS Shale
Springs Road well site
Source IGas
Slide 9 Interim Results Presentation April 2018
Unconventional Resources – Industry Activity
IGas • Drilling planned at Tinker Lane and Springs Road (Gainsborough Trough)
• Testing at Ellesmere Port (Cheshire)*
• Application to drill further well at Ince Marshes
Cuadrilla • Reported “excellent rock quality” and “high natural gas quantities” within
several zones in vertical well at Preston New Road
• Completion of first UK horizontal shale gas well at Preston New Road
• Drilling second horizontal at Preston New Road
• Hydraulic fracturing and testing of two horizontal wells later in 2018
Third Energy • Hydraulic Fracturing and Testing at Kirby Misperton-8 later in 2018**
INEOS Shale • Completed 3D acquisition in East Midlands
• Planning applications/Appeals for multiple exploration wells in East Midlands
• Planned 3D acquisition in Yorkshire
* Subject to planning/appeal
** Subject to final approvals
Slide 10 Interim Results Presentation April 2018Conventional Exploration/Appraisal
Strategy: adding additional reserves/revenues through an active drilling programme whilst managing
risk and financial exposure through farm-out
• Significant UK conventional prospect portfolio
• Successful farm-outs at Biscathorpe
• More active operational phase = drilling planned at Biscathorpe*, Holmwood* and North Kelsey**
• 3D and drilling planned at Resolution and Endeavour gas discoveries in 2019**
• Continued marketing of farm-outs and potential divestment of non-core assets
* Subject to final regulatory approvals
** Subject to further farm-out
Slide 11 Interim Results Presentation April 2018Conventional Resources – Resolution & Endeavour
Endeavour Gas Discovery • Acquired interest at minimal firm consideration (c. £15K)
(P2304*) • Endeavour gas discovery proven by 3 wells, tested at rates of up to 34
(27 bcf**) mmcfg/d and 1280 bopd condensate from the Plattendolomit
Resolution Gas Discovery • Early North Sea discovery (Total:1966)
(P1929*) • Capable of 25-50 mmcfg/d using modern completion techniques
(337 bcf**)
• 3D seismic acquisition planned to optimise appraisal drilling programme
• Seeking farm-in/technology partner
Resolution Prospect
* Egdon 100%
Named after HMS
** Prospective Resources Net to Egdon
Resolution, the
Whitby built North Resolution Gas Discovery Endeavour Gas Discovery
Sea collier used by
Captain Cook in his
second voyage of
exploration from
1772 to 1775Resolution
Endeavour
Slide 12 Interim Results Presentation April 2018Conventional Resources - Biscathorpe & North Kelsey Prospects
Biscathorpe Prospect • BP (1987) BP well had oil in thin sand, reservoir expected to thicken down-
Appraisal dip
(5.0 mmbo*) • Mean Gross Prospective Resources of 14 mmbo
• Operations to commence in Mid 2018
• Application to extend existing planning
North Kelsey Prospect • Prospect with multiple reservoir targets – Wressle analogue
(5.2 mmbo*) • Mean Gross Prospective Resources of 6.5 mmbo
• Drilling expected 2018 – subject to further farm-out
• Application to extend existing planning deferred for site visit on 9 April
Biscathorpe Prospect - Top Dinantian Depth Map (m TVDSS) North Kelsey Prospect - Top Dinantian Depth Map (m TVDSS)
* Net Egdon Mean Prospective Resources
Slide 13 Interim Results Presentation April 2018Conventional Resources - Holmwood Prospect
Holmwood Prospect • Drilling 2018 subject to approval of final planning condition
(1.14 mmbo*) • Egdon farmed out to UKOG (2015)
• Kimmeridge Limestone potential as seen in Horse Hill-1
• Drilling and Testing in offset locationsHorse Hill has received approval
for long term testing and further drilling
Source Europa Oil and Gas
* Net Egdon Mean Prospective Resources
Slide 14 Interim Results Presentation April 2018Production
Strategy: Continue to focus on maximising production rates, revenues and profitability from existing
producing assets through targeted investment
Production Guidance 2017-18: 100 boepd*
Ceres • Ceres production to re-commence during 2018 adding 145 boepd
(Egdon 10%)
Keddington • Review of options to increase field production with decision on additional
(Egdon 45%) drilling in 2018
Avington • Production is currently shut-in
(Egdon 28.07%)
Fiskerton Airfield • Workovers of FA-3 and FA-1 well completed
(Egdon 80%) • Production increased from 16 to approaching 30 bopd
Wressle • Planning Appeals dismissed January 2018
(Egdon 25%) • New planning application to be submitted in May
• 125 bopd initial production (net to Egdon)
Shut-in fields • Actively reviewing options to re-establish production at Waddock Cross, Dukes
Wood, Kirklington and Kirkleatham
* Barrels of oil equivalent per day
Slide 15 Interim Results Presentation April 2018Production - Wressle Development
Wressle Development • Gross 2P Reserves 0.62 mmbo and 2C Resources 1.53 mmbo
(Egdon 25% operated) • Production rate of c. 500 bopd (125 bopd Net Egdon)
• Planning Appeals dismissed January 2018
• Application submitted to extend existing planning for further 12 months*
• Site investigation boreholes and deeper cored boreholes acquired = revised
site design and hydrogeological risk assessment
• New development planning application to be submitted in 4-5 weeks
well site, PEDL180
* From date of planning decision
Slide 16 Interim Results Presentation April 2018Production - Acquisition - Fiskerton Airfield Oil Field
Fiskerton Airfield • Acquired for $750,000 in cash
(Egdon 80% operated) • Sale of 20% to Union Jack Oil plc
• Field shut-in November 2017 to February 2018
• Workovers completed during period January to March 2018
• Production increased from 16 bopd to approaching 30 bopd
• Further optimisation
• Evaluation of reprocessed 3D will inform future drilling activity
* Field
Test Development
operations Plan
at the Wressle-1 well site, PEDL180
** Subject to receipt of planning and other consents
Slide 17 Interim Results Presentation April 2018Outlook & Planned Activity
Production • Guidance of c.100 boepd FY 2018
• New Wressle planning application
• Re-start Ceres well in H2 2018
Unconventional • Drilling of play-opening Springs Road-1 well
Resources • Increased activity by IGas, Cuadrilla, Third
Energy and INEOS Shale
Conventional • Biscathorpe-2 in mid-2018
Resources • Holmwood-1 (carried) later in 2018
• Farm-out a marine 3D in 2019 over
Resolution and Endeavour gas discoveries
Corporate • Farm-outs and divest non-core assets
• Review selected opportunities
• Financial discipline
Slide 18 Interim Results Presentation April 2018Summary
“A leading UK “shale” “Active 2018 conventional “Financial Discipline”
portfolio” exploration programme”
One of two listed UK Drilling programme targeting Balance sheet, no debt,
companies with material shale 11.35 mmbo* net to Egdon operatorship and farm-outs
acreage
Holmwood = “topical” Onshore projects robust in
Drilling of “Play opening” Kimmeridge Limestone play in improving commodity price
Springs Road-1 well in 2018 the Weald Basin environment
Significant sector catalysts in
2018: drilling, hydraulic
fracturing and testing
* Net Egdon aggregated Mean Prospective Resources: Holmwood, Biscathorpe and North Kelsey
Slide 19 Interim Results Presentation April 2018Disclaimer This document comprises the written materials/slides for a presentation (together with any accompanying information communicated verbally (including any questions and answers session and any material distributed with it), the Presentation) by Egdon Resources plc (the Company). This Presentation does not constitute or form part of any offer or invitation to purchase or inducement to sell or issue, or any solicitation of any such offer to subscribe for or buy, any shares in the Company or any other securities to any person in any jurisdiction. Neither this Presentation nor any part of it, nor the fact of its distribution, shall form any part of, or be relied on in connection with, any contract or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company or form part of any invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (as amended). The information contained in the Presentation reflects the business and financial affairs of the Company which are subject to change without notice and audit. The information contained herein is for discussion purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No reliance may be placed for any purposes whatsoever on the information contained in this Presentation or on its accuracy or completeness or on opinions contained herein or communicated in relation hereto. No representation or warranty, express or implied, is or will be given by or on behalf of the Company’s directors, officers or employees or their respective agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and none of the foregoing accept any liability whatsoever arising from any use of this Presentation, its contents or otherwise arising in connection therewith. The Presentation is intended for distribution in the United Kingdom only to persons who are reasonably believed to be (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order); (b) persons falling within Article 49(2)(a) to (d) of the Order; or (c) to those persons to whom it can otherwise lawfully be distributed (together, Relevant Persons). Any investment or investment activity to which this Presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This Presentation must not be acted on or relied on by persons who are not relevant persons. If you have received this Presentation and you are not a relevant person you must return it immediately to the Company. Neither this Presentation nor any copy of it may be taken or transmitted in or into the United States, Australia, Canada, South Africa or Japan or their respective territories or possessions or to any national, citizen or resident thereof or to any corporation, partnership or other entity created or organised under the law thereof, nor into any other jurisdiction where the distribution thereof would break any applicable law (the Excluded Territories). Any failure to comply with this restriction may constitute a violation of local securities laws. The distribution of this Presentation in other jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions. This Presentation does not contain or constitute an offer of securities for sale in the Excluded Territories. Certain statements, beliefs and opinions contained in this Presentation, particularly those regarding the possible or assumed future financial or other performance of the Company, industry growth or other trend projections are or may be forward-looking statements, beliefs or opinions and as such involve risks and uncertainties. By their nature, forward-looking statements, beliefs and opinions involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements, beliefs and opinions. Actual results and developments may differ materially from those expressed or implied by such statements, beliefs or opinions, depending on a variety of factors and accordingly there can be no assurance that the projected results, projections or developments will be attained. No representation or warranty express or implied is given or made by the Company or any of its directors, employees or advisers or any other person as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts or the statements, beliefs and opinions expressed herein and nothing in this Presentation is or should be relied on as a promise or representation as to the future. The contents of this Presentation and any accompanying information communicated verbally as part of the Presentation (including any questions and answers session and any material distributed with it) are to be kept confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. By accepting receipt of this document, you agree to be bound by the limitations and restrictions set out above. Slide 20 Interim Results Presentation April 2018
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