Shell Farms Into Egdon's North Sea Blocks. Seismic Survey Planned for 2021

Shell has completed its farm-in into Egdon Resources' North Sea licenses containing the Resolution and Endeavour gas discoveries, Egdon said Tuesday.

Following the initial farm-in agreement struck in January, the UK Oil and Gas Authority has approved the transfer of a 70% interest and operatorship in both licenses (P1929 and P2304), and the associated documentation including Joint Operating Agreements in respect of both licenses has now been executed.

Egdon retains a 30% interest in the licenses. Under the terms of the farm-in agreement, Shell will pay 85% of the costs of the acquisition and processing of the 3D seismic survey covering both the Resolution and Endeavour gas discoveries. 

Under the terms of the licenses, this work needs to be completed by May 31, 2021.  The carry on the acquisition costs will be capped at US$5 million gross, beyond which Egdon would pay 30% of the survey costs. Furthermore, Shell will also pay 100% of all studies and manpower costs through to the well investment decision on the Licences.

Commenting on the news, Mark Abbott, Managing Director of Egdon Resources plc, said: "We are delighted to have completed the transfer of interest and operatorship to Shell in respect of these important, and potentially valuable, licenses for Egdon.  The focus will now be on progressing appraisal activity on the Resolution and Endeavour gas discoveries.

The first part of this activity will be the acquisition of a marine 3D seismic survey during Q1 2021.  We look forward to building on our good working relationship with Shell and benefiting from their substantial worldwide operational experience and expertise."

A Competent Person's Report prepared by Schlumberger Oilfield UK PLC (April 2019) reported Mean Contingent Gas Resources of 231 billion cubic feet of gas ("bcf"), with a P90 to P10 range of 100 to 389 bcf, attributable to the Resolution gas discovery (P1929).

The Resolution discovery was made by Total in 1966 when well 41/18-2 flow tested gas from the Permian aged Zechstein carbonate (limestone) reservoir.  Additionally, Egdon estimates that the Endeavour gas discovery (P2304) contains Mean Contingent Resources of 18 bcf, with a P90 to P10 range of 10 to 28 bcf.