Egdon Resources has reached agreement to farm-out 10% interests in its Nottinghamshire licences PEDL118 and PEDL203 to subsidiaries of Angus Energy Limited (Angus).

In PEDL118, Angus Energy Eakring Development Limited will earn a 10% interest in the licence in return for paying 20% of the costs of the currently drilling Dukes Wood-1 well. Following completion Egdon will hold a 65% operated interest in the licence. As part of the agreement Egdon has also granted Angus an option to acquire up to a further 10% interest in the licence on commencement of drilling of the second well on the licence. In consideration, Angus will carry Egdon on the same terms for this second well and will pay certain back costs for any additional acquired interest.

In PEDL203 Angus Energy Kirklington Development Limited will earn a 10% interest in return for paying 20% of the cost of the forthcoming sidetrack of the Kirklington-2 well. Following completion Egdon will hold a 65% operated interest in the licence.

The transaction is subject to regulatory approval by the Department of Energy and Climate Change.

Angus is a private Scottish registered company which is looking to develop a portfolio of onshore UK producing assets.

Commenting on the transaction, Mark Abbott, Managing Director of Egdon said, 'We are pleased to welcome Angus as a partner on these licences. With this farm-out and the recently completed sale to Terrain we have reached our objective of reducing our cost and risk exposure on the Eakring-Dukes Wood and the Kirklington projects whilst maintaining a material operated interest. We now look forward to the results of the current drilling at Dukes Wood-1, the first well to be drilled on this oil bearing structure since the 1940's.'

Tags: Egdon Resources Plc