Egdon Resources to sell 20% interest in Fiskerton oil field, UK

Egdon Resources has reached an agreement to sell a 20% interest in the producing Fiskerton Airfield oil field in Lincolnshire licence EXL294 to Union Jack Oil.

The Fiskerton oil field was wholly acquired by Egdon from Cirque Energy (UK) last month in a deal valued at $750,000.

Under the current transaction, Union Jack will make a payment of around £137,000 in exchange for the 20% interest.

Furthermore, Union Jack is required to fund the total cost of re-processing of the 3D seismic dataset to assist in re-mapping the approximately 24km² area surrounding Fiskerton.

Egdon Resources managing director Mark Abbott said: “We have elected to sell a minority interest in the field to manage our overall financial exposure to the asset going forward and to enable evaluation of the up-side at minimal cost through the carried seismic reprocessing.

“As we stated back in July 2017, the field has suffered from a lack of investment over recent years and we plan to undertake simple low-cost workovers to enhance production and profitability in the short-term, adding valuable near-term cash-flow to Egdon’s portfolio.

“In the longer term, the reprocessed 3D seismic will inform our views on the potential to enhance productivity through in-fill drilling.”

Towards the re-processing exercise, Union Jack is expected to incur a gross cost of around £35,000.

The field is currently producing around 16 barrels of oil per day (bopd) from one of two production wells.

In a bid to enhance the cash flows and profitability of the operation, Egdon is planning to increase production initially to about 30bopd-40bopd through well interventions.

New tubing, pumps and isolating water producing zones are expected to be installed during the next few months in order to work over both the currently producing FA-3 and the shut-in FA-1 wells.

The transaction is conditional on the receipt of approval from the Oil and Gas Authority (OGA).