Minnow Egdon Extends UK Offshore Acreage (Update)

(Adds further payment details in para 3)

UK explorer Egdon has bought 100%  of UK block 41/24) from Arenite Petroleum and Europa Oil & Gas for a down-payment of just £15,000 ($17,788), it said December 4. The licence is south of Egdon's 100% owned blocks 41/18 and 41/19 offshore north Yorkshire, which contains the 1966 Resolution gas discovery.

The nominal payment covers the sellers' costs of sale and the Oil & Gas Authority levy and there will be future staged payments contingent on the successful completion of various potential exploration activities and/or on reaching certain production milestones, Egdon said.

According to Europa, the payment schedule could reach £1.45mn, the biggest payment of which would be the final £1mn if production reaches 20bn ft³ (or oil equivalent) from any wells located wholly or partly within the area covered by the licence.

The Resolution discovery structural closure is mapped by Egdon as extending southwards from P1929 into P2304 and the licence also contains a second gas discovery confirmed by wells, 41/24A-1 (1969, Total), 41/24A-2 (1981, Total), and 41/24-3 (1993, Conoco) which tested at rates of up to 34mn ft³/day of gas and 1280 barrels/day of condensate from the Plattendolomit, a Zechstein carbonate unit slightly younger than the Hauptdolomit reservoir tested in the Resolution discovery well. The new licence contains additional prospectivity in deeper gas bearing Carboniferous sandstones underlying the proven Zechstein reservoir sequences.

Egdon's CEO Mark Abbott said the company would integrate its evaluation of the new licence into its detailed understanding of P1929 with a view to progressing appraisal of the proven gas resources in the combined area.