Egdon Resources has been forecasting oil and gas production of 500 barrels of oil equivalent per day (boepd) for some time and has yet to achieve that target. It did not do so in the six months to the end of January either, but there were extenuating circumstances and the target should, finally, be met later this year.
In the latest half year, oil production averaged 97 boepd as against 62 boepd in the same period last year. The increase came principally from the 75 per cent owned and operated Keddington oilfield in Lincolnshire. There were also modest contributions from the two-thirds owned and operated Kirklington oilfield in Lincolnshire and the Avington field in Hampshire (37 per cent owned but not operated).
Bad winter weather delayed the start-up of production at Kirkleatham (40 per cent owned and operated) gas field near Redcar, while the expected 200 boepd from the North Sea Ceres gas field was not forthcoming because a BP platform had been shut for maintenance since last June. Both of them should be on stream this summer.
In addition, Egdon raised £4.5m (producing a £4.3m gain in the latest results) from the sale of stakes in two early stage French shale-gas projects. That money transforms the balance sheet and gives Egdon the resources to drill at least three wells in 2011 and spend more money on exploration rather than development work and possibly acquisitions too.
EGDON RESOURCES (EDR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 19.5p | MARKET VALUE: | £25.5m | |
| TOUCH: | 19-20p | 12-MONTH HIGH: | 24p | LOW: 12p |
| DIVIDEND YIELD: | nil | PE RATIO: | 6 | |
| NET ASSET VALUE: | 16p* | NET CASH: | £4.27m | |
| Half-year to 31 Jan | Turnover (£000) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 498 | 0.15 | 0.20 | nil |
| 2011 | 932 | 4.41 | 3.37 | nil |
| % change | +87 | - | - | - |
Aim: Oil and gas exploration and production *Includes intangible assets of £8.91m, or 7p a share. | ||||
