Egdon Resources - Extensive shale sequence with gas indications
IGas has released an initial update on drilling activity at Springs Road, with over 250m of hydrocarbon bearing shale encountered. Pressurised core samples were shown to release gas at atmospheric pressure as can be seen in this video released by IGas. Our last published conventional asset value for Egdon was 12.7p/share and included 3.6p/share of risked value for Biscathorpe-2 which we expect to remove. The valuation of Egdon’s net shale resource (188,000 net acres) remains uncertain but, in our view, has the potential to be worth a risked c 100p/share based on the current expectation of well cost, type curves and forward gas prices, assuming a supportive political and planning backdrop.Egdon Resources is an onshore U.K. focused oil and gas exploration and production business. As of Jul 31 2017, Co. had net proven plus probable oil reserves of 0.6 million barrels and net proven plus probable gas reserves of 1.18 billion cubic feet.
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