Egdon Resources has reached agreement in respect of a farm-out of Weald Basin, Petroleum Exploration and Development Licence PEDL143 to UK Oil & Gas Investments PLC.
PEDL143 contains the Holmwood Prospect, which the PEDL143 partnership plan to test with the Holmwood-1 exploration well. Regulatory consent to drill the well is currently awaiting the outcome of a planning inquiry held by the Planning Inspectorate following appeal by the license group. The operator of PEDL143 is Europa Oil & Gas Limited.
Under the terms of the agreement, UKOG will pay a 40% share of the Holmwood-1 drilling costs in order to acquire a 20% working interest in PEDL143 from Egdon. UKOG's share of well costs will be capped at £1.2 million net to UKOG (i.e. 40% of a gross Holmwood-1 well cost estimate of £3 million). Gross well costs above £3 million, should they arise, will be met according to the working interests in PEDL143. Egdon's interest in the licence on completion will be 18.4%.