Under the terms of the agreement, Terrain and Corfe will each pay 12.5% of the cost of the planned Burton on the Wolds-1 exploration well to earn a 6.25% interest. As a result Egdon's exposure to the well is reduced from 50% to 25% up to an agreed well cost. Terrain and Corfe have also agreed the same terms with Celtique Energie Petroleum.
On completion the licence interests in PEDL201 will be as follows: Egdon Resources U.K. 37.50% (operator); Celtique Energie Petroleum 37.50%; Terrain Energy 12.50%; Corfe Energy 12.50%. The transfer of interests is subject to the approval by the Department of Energy and Climate Change.
PEDL201 was awarded to Egdon and Celtique in 2008 and is located on the southern margin of the Widmerpool Gulf geological basin. The Burton on the Wolds Prospect has been mapped on proprietary 2D seismic data which was acquired by Egdon in May 2011. Evaluation has highlighted a prospect with targets at two distinct stratigraphic levels. The shallower target, the Rempstone Sandstone, is productive at the nearby Rempstone oil field and is mapped as having gross Best Estimate Prospective Resources of 1.4 million barrels of oil (mmbo). A seismic anomaly, possibly indicative of a carbonate reef, underlies the Rempstone Sandstone and has estimated gross Best Estimate Prospective Resources of 2.17 mmbo and would represent a new play in the basin.
The planned well will be shallow with a drilled depth of around 1000 metres to test both targets. A potential site has been identified and lease negotiations are progressing along with development of a planning application. Subject to planning it is intended that the Burton on the Wolds-1 well will now form part of Egdon's planned 2012 multi-well programme in the East Midlands.
Commenting on the farm-out Mark Abbott, Managing Director of Egdon said:
'The Burton on the Wolds Prospect combines a lower risk reservoir target offsetting nearby production with a higher risk, higher potential play at present untested in the basin. This farm-out agreement enables Egdon to promote the well up the drilling schedule whilst managing our risk and cost exposure on the prospect. We now expect to submit a planning application during the second quarter with a view to drilling before end 2012, subject to all statutory approvals.'
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