Egdon Resources PLC said it is encouraged by results of a resource evaluation that indicates that geological conditions appear favorable for development of a potentially material shale on two UK East Midland licenses in which the company holds interests.
RPS Energy evaluated PEDL 139 and 140, in which the company holds 13.5% interests, and assessed potential gas volumes and the geological chance of success based on analogous US plays.
PEDL covers 100 sq km and PEDL 140 takes in 141 sq km in an area of Lincolnshire underlain by the Gainsborough trough, a basin that contains a 125-m thick sequence of the Carboniferous age Pendleian shale more than 2,000 m deep. The Pendleian shale is the approximate age equivalent of parts of the Bowland shale, the main shale gas reservoir target under evaluation in the Bowland basin in northwest England.
RPS estimated mean gas in place of 1.76 tcf net to Egdon's interest, of which 1.22 tcf is accessible following a review of surface and subsurface access constraints. The mean prospective resource net to Egdon is estimated at 190 bcf based on recovery rates in analogous US plays. RPS estimated the geological chance of success to be 24%.
Egdon will participate in a deep exploratory well during 2014 subject to obtaining all necessary consents and approvals. The company's costs are carried through this work program. Operator of PEDL 139 and 140 is eCORP Oil & Gas UK Ltd., a subsidiary of eCORP International LLC, Houston. Dart Energy Ltd., Brisbane, has a 16.5% interest in the two licenses.
In addition to the Pendleian shale, Egdon interprets potential for significant additional shale-gas resources in the underlying Carboniferous succession on the blocks that will be evaluated by any future drilling. Egdon is also evaluating the unconventional resource potential in certain of the company's other East Midlands licenses.
Egdon said, "We welcome the announcements in December 2012 by the UK government in relation to gas strategy, the setting up of the Office of Unconventional Gas and Oil, and the approval for restarting of shale-gas exploration in the UK. There is now a clear regulatory framework for the exploration of the UK's unconventional oil and gas resources which have the potential to make a significant contribution to the UK's economy and energy mix over the coming decades." (OGJ Online, Dec. 13, 2012).
Egdon noted that any development would have to take into account permitting, legal issues, environmental issues, and availability of project finance and that RPS had not made a risk assessment of these factors. RPS did assume that adequate rigs and fracing units will be available to drill and complete the large number of horizontal wells that would be needed for full development.