Egdon Updates Ops at Kirkleatham, Keddington

Egdon Updates Ops at Kirkleatham, Keddington

Wednesday, April 27, 2011
Egdon Resources plc

Egdon Resources provided an update on operations at two key UK projects.

Egdon reported that first gas flows were achieved on April 19, 2011 at the Kirkleatham gas development in PEDL068 where the Company holds a 40% operated interest. The joint venture partners are Sterling Resources (UK) Ltd (47%), Yorkshire Exploration Limited (8%) and Montrose Industries Limited (5%).

During the early stages of production from the field, gas flow rates and their duration will be restricted as system performance and gas quality is monitored and training undertaken of the site operatives. It is expected that flow rates will be gradually ramped up to the maximum of around 5 million cubic feet of gas per day and 24 hour operations will commence in the coming weeks.

The gas from Kirkleatham is sold to Sembcorp Utilities (UK) Limited, the operator of the Wilton site for use in their GT2 gas turbine power plant.

Egdon also reported that drilling operations have now been completed at Keddington-4 in Lincolnshire license PEDL005(Remainder) where Egdon holds a 75% operated interest. The joint venture partners are Terrain Energy Limited (15%) and Alba Resources Limited (10%), a wholly owned subsidiary of Nautical Petroleum.

The Keddington-4 well was drilled as a re-entry and horizontal sidetrack from the Keddington-1Z "donor" well, which was drilled by Candecca Resources in 1998. The British Drilling and Freezing Limited BDF28 drilling unit mobilized to site on April 1, and operations began on 4 April. The plugging-back of the existing well was completed and the drilling of the sidetrack commenced at 0700 hours on 9 April from a kick-off depth of 2080 meters. The well reached its total depth of 2468 meters at 1800 hours on April 22. A total of 120 meters of the primary reservoir Unit 1 sandstone with high gas readings indicative of the presence of oil was penetrated some 6 meters shallower than in the Keddington-1Z well. An additional 65 meters of Unit 2 was also drilled. Due to borehole stability concerns, it was decided not to deepen the well as planned to penetrate the "Namurian" sandstones, which had gas indications in Keddington-3. Keddington-4 has now been completed for pumped production with a slotted liner over the entire horizontal section of the well. Once the drilling rig has demobilized from site later this week all surface facilities will be reinstated and the well put into production. Production from the adjacent Keddington-3z well, which has been suspended for safety reasons during the drilling operations, will resume once Keddington-4 has been tested.

Commenting on these developments Egdon's Managing Director Mark Abbott said, "Having achieved the milestone of first gas at Kirkleatham, we now look forward to achieving optimum production rates in the coming weeks. The presence in Keddington-4 of a significant section of Unit 1 reservoir up-dip of the Keddington-1Z well is encouraging and we look forward to the results of production from this well during early May."