UK Egdon Denied Licence Extension

UK explorer Egdon Resources was denied permission to extend consent for its Wressle oil and gas field by the North Lincolnshire council planning committee (NLCPC), it said August 1.

Egdon CEO Mark Abbott said the company would appeal, as it had been recommended for approval by the council's own professional planning officers. An appeal for a previous refusal of such an application had been successful, he said, and Egdon had recently submitted a new application for the development of the Wressle oil field which it "strongly believes comprehensively addresses the reasons for the refusal of the original planning applications and the subsequent appeals."

Analysts at Cantor Fitzgerald said the council decision seemed "baffling, in the circumstances, but unfortunately somewhat in keeping with the inconsistent historical behaviour of the NLCPC. While Wressle does not make up a significant proportion of our risked valuation, it would provide welcome additional production and cashflow, and yesterday’s decision is clearly disappointing." It maintained its 'buy' recommendation for the stock. Wressle-1 well has flowed oil and gas from three separate reservoirs: Ashover Grit, Wingfield Flags, and Penistone Flags, totalling 710 barrels of oil equivalent/day from all zones.

The refusal came a few days after Infinis, sole owner of Alkane Energy, sold its entire 13.8% interest to US privately-owned Heyco Energy Group July 30, at 12.8 pence ($0.178)/share. Alkane took 40mn ordinary shares in Egdon in exchange for its shale exploration acreage in June 2014. Heyco has held shares in the company since 2009, through its subsidiary Petrichor.

Abbott said that the continued investment by Petrichor, at a significant premium to Egdon's current share price, was "a considerable vote of confidence in Egdon’s business model" and its assets' potential.