I have been watching Egdon Resources for a while, and think they may prove to be worth an investment.

I like the idea of a British company finding oil and gas on UK soil, and as Egdon have a site at Waddock X, fairly close to where I live, I have decided to follow their progress.


Egdon has interests in 19 licences in the hydrocarbon producing basins of the UK and France, containing two oil discoveries and a further 48 prospects.

The Company's shares are traded on the Alternative Investment Market of the London Stock Exchange.




OIL AND GAS ASSETS

Egdon holds 19 licences, all of which lie within proven oil and gas producing basins and contain a mix of oil and gas prospectivity. The assets and technical management of the Company are divided into four geographically defined business areas; Southern England, Northern England (and adjacent offshore areas), East Midlands and France.





Company website : http://www.egdon-resources.com

13.01.2006

Egdon Finds Gas In Yorkshire And Oil In Dorset But Further Testing Is Required
Egdon Resources, which has seen its share price increase four-fold on Londons Alternative Investment Market over the past year, has announced initial results from its multi-well onshore UK drilling campaign.

Testing operations on the Waddock Cross-3 horizontal well in the Wessex Basin of southern England have pumped between 32 and 48 barrels of per day of oil from the Cycle 3 sandstones. The overall flow rate was between 270 and 400 barrels per day (there was a 12 per cent oil water cut). The well was designed to probe an elevated part of the Waddock Cross oil accumulation and is a follow-up to the 2004 Waddock Cross-2 well, which flowed around 30 bpd and confirmed a 20 million barrel oil discovery.

The oil flow numbers from Waddock Cross-3 appear to be a disappointment: reservoir modelling by RPS Troy Ikoda had predicted that a horizontal well through the Cycle 2 and 3 sandstones could produce at an average rate of in excess of 200 barrels per day. However, the produced oil has not experienced the emulsion problems encountered at Waddock Cross-2 and the rate was constrained by the pumping equipment. Testing operations are still ongoing and further analysis work is planned to determine the economic options for a possible development at Waddock Cross.

There was also news from Egdons exploration campaign in the gas-prone Cleveland Basin of North Yorkshire. The Kirkleatham prospect was tested in the 1940s by two wells which at the time produced sub-commercial gas-flows. The onshore specialist, which has also branched out into gas storage, reckons modern drilling and completion techniques deployed updip will tap into a workable gas reservoir.

Early results would appear to confirm that prediction. Drilling and logging operations on the Kirkleatham-4 well have been completed, having encountered gas shows in the Zechstein carbonates. The well has confirmed the presence of a 19 metre gas column in the Cadeby formation, where wireline logs indicated high gas saturations and good porosity. The well was not tested, however: this procedure, which will be key to determining the commercial future of the deposit, will be undertaken using a workover rig.

The drilling rig is now set to move to the Westerdale-1 well site, also in North Yorkshire. This well is due to spud next week and will test an accumulation 3.7 km north of the Ralph Cross-1 gas discovery which flowed at rates of up to 6 million cubic feet per day fo gas from a 20.5 metre gas column in the fractured Zechstein carbonates. Egdon plans to test this reservoir in Westerdale-1 as well as targeting the underlying Carboniferous formation. This should take about 21 days to drill.

After this operation, the rig - the much traveled BDF 28 - will move down south to drill the Portland-1 well. This hole is not prospecting for oil and gas but checking on the suitability of the salt sequence here for a below-ground gas storage business. Egdon entered the gas storage market in April and hopes to have this, its first operation, up and running by 2008.

This is a timely move and given recent events in Russia - which has flexed its muscle as a regional energy power, causing jitters across the European gas supply chain - could prove very astute in the longer term. Imported gas is expected to meet half of UK demand by 2010 and storage capacity is expected to play a key role in the countrys ability to ensure supply security and swing capability to meet winter peaks in energy demand. At present, the UKs gas storage capacity is currently about 4 per cent of annual consumption, compared with 25 per cent in France and 21 per cent in Germany.

With supplies increasingly coming from further afield, gas storage facilities look set to become a vital resource in the gas supply marketplace, said joint MD Andrew Hindle at the launch of Egdons new business venture. Egdon has used its extensive knowledge of the geology of the UK onshore to identify the potential site at Portland to participate in this emerging growth business within the UK oil and gas industry. It is currently anticipated that the initial working volume will be between 10 and 20 billion cubic feet and the first cavity on the site should become operational in 2008.

Oilbarrel.

Bud day at the office for EDR today. Anyone have any ideas why?

queen1,

No, I'm surprised by the drop.

Me too Andy and a little concerned. To be fair the sp has been fantastic over the last 12 months and all along the way there has been one step back followed by 2 forwards so I'm hoping this is the step back and two steps forward are on their way!

A stunning break-out day for the EDR sp today. Perhaps this is the first of the two steps forward!

Further test results published today look good. And we should have a clearer understanding of the potential of Portland in May. Exciting times.

new to the thread, after buying into EDR, wish I got in earlier though!!!

A very warm welcome to you vistauk. I hope you enjoy the EDR ride as much as I have so far.

On another point I see that Seymour Pierce put out a buy recommendation on EDR today.

Positive buying news although the SP seems to be taking another little breather.

The Company was notified on 24 March 2006 that as at 22 March 2006, as a result
of acquisitions of ordinary shares in Egdon Resources ('Ordinary Shares'),
Credit Suisse Securities (Europe) Limited held an interest in 2,263,333 Ordinary
Shares representing approximately 3.96 per cent. of the issued Ordinary Share
capital of the Company.

Debt free and funds almost double what they were last year. Portland however will still be the key:

Egdon Resources reported slightly narrower first half losses, but said its exploration business is looking forward to an exciting second half drilling.

The onshore UK oil and gas exploration and production business reported first half to Jan pretax loss of 238,000 against a year earlier loss of 296,000.

Following December's 4.8m institutional placing, the company is debt-free, with net funds at end-January of 6.3m, against 3.7m a year ago.

Chairman Philip Stephens said Egdon 'is experiencing operational success in all areas of its business, and we are particularly pleased with the confirmation of gas in two of our wells. The Portland Gas Storage Project is progressing, with a well currently being drilled to confirm the viability of creating salt caverns for storing gas.'

What on earth has spooked the market in EDR today??

Why has this gem drop today...anybody any ideas?

Something seems to have spooked the market in EDR although there have been pullbacks recently which have been quickly reversed, followed by the achievement of new highs. Let's hope this is a similar scenario.

Queen1,

I visited the Waddock Cross site at the weekend.

The site has been developed since I was last there, and the Egdon sign is at the gate.

I could see where the rig had been, but sady it has already left, so not much to see, but we enjoyed a nice drive in the countryside anyway.

Thanks Andy, glad you enjoyed a bit of fresh air! Any views on the recent (including today) sp dip?

queen1,

No, not really, although I did wonder why the price raced up in the first place.

Portland is not a done deal by any means, IMO, and if the site proves suitable, they will have to raise considerable finance, around 100 million, I believe, so perhaps it just got a bit ahead of itself?

Thanks Andy...100million is quite an amount to raise...so that is why EDR dipped to 123p today.

hlyeo98,

To be honest, that information was already in the public domain, and had been for some time, so that certainly wouldn't have caused today's fall.

Chart suggests some support around this price, but today's fall was with volume, so with the other indicators looking gloomy, it will be interesting to see what tomorrow brings.

Andy - Does someone know something we don't about Portland as the SP weakness these last few days is becoming worrying?

Freefall now. What the hell's going on???