Egdon proposes, subject to approvals, the acquisition of Alkane Energy’s UK shale gas portfolio and a £7m share placing.

We see this acquisition as good value, building Egdon’s existing acreage in the Gainsborough trough, an area widely considered a ‘sweet spot’ for UK shale gas potential. Meanwhile, the group holds material exploration prospects ready to drill in 2014-16.

Near term, we highlight prospects Wressle and Burton on the Wolds, which, if successful, could add 20p to the shares.

Tags: Egdon Resources Plc