Farmout Option Agreement for Licence PL081 in the UK
York Energy (UK) Holdings Limited (“York”), an Alpha Energy group company, is pleased to advise that it has entered into a Farmout Option Agreement (the “Agreement”) with Egdon Resources plc (AIM:EDR), the UK Energy Company (“Egdon”), relating to onshore Production Licence PL081 (the “Licence”) in North Yorkshire, UK.
The Licence contains the Weaverthorpe Prospect (“Weaverthorpe”). Weaverthorpe is a relatively shallow Bunter Sandstone (Triassic) prospect located immediately up-dip of interpreted gas pay in the Fordon-2 well (drilled by BP in 1974). Egdon’s initial evaluation indicates an estimated Mean prospective gas resource of 58 billion cubic feet.
Under the terms of the Agreement Egdon has a period of six months from 3 February 2023 to elect to farm into the Licence (the “Option”). During the Option period, Egdon will undertake additional technical and operational work to de-risk the opportunity, including reprocessing of the vintage 2D seismic data and integration of this with the existing 3D seismic data which defines the western part of the prospect.
As consideration for the grant of the Option, Egdon will pay 100% of the 2023 licence fees.
Should Egdon exercise the Option, it will earn a 70% interest in the Licence and assume operatorship. As consideration Egdon will pay 100% of the costs associated with the planning, drilling, logging, and either short term testing and completion or plugging and abandonment of a well to test the Weaverthorpe Prospect.
In addition, on exercise of the Option, Egdon will pay York a cash sum of £100,000, less any licence fees that were paid by Egdon for 2023.
York has an agreement with the current operator, Third Energy UK Gas Limited (“Third”), entitling it to
be assigned the entire legal and beneficial interest in PL081. Egdon will pay 100% of the costs associated with the transfer of the Licence from Third to York and to Egdon (Such transfer being subject to NSTA approval.)
York Energy (UK) Holdings Limited is a private UK-based energy company focused on exploration and production activities in Europe. York is part of the Alpha Energy group (www.alpha.energy) and an affiliate of Alpha Oil & Gas LLC, an operator of assets in the US.
York currently has rights to 100% interest in the PL081 licence in the UK and 100% interest in the Ichnyanska Production Sharing Agreement in Ukraine, which allows York to produce hydrocarbons from a 500,000+ acre area located within Ukraine’s primary oil & gas province.
Egdon Resources plc (LSE: EDR) is an established UK-based energy company focused on onshore exploration and production in the UK. Egdon holds interests in 35 licences in the UK and has an active programme of exploration, appraisal and development within its portfolio of oil and gas assets. Egdon is an approved operator in the UK. Egdon was formed in 1997 and listed on AIM in December 2004.