Shell farm-in moving forward after Egdon gains extension for UK licences

Posted On: 08-06-2020

The UK’s Oil and Gas Authority (OGA) has granted extensions to Egdon Resources for P1929 and P2304 licences offshore the UK. Oil major Shell farmed into the two licences in late January. Namely, it agreed to acquire 70 per cent stakes in both licences. Egdon’s UK subsidiary would retain the remaining 30 per cent interests. Shell will also be appointed as the licence operator. OGA granted extensions for the P1929 and P2304 licences, which contain the Resolution and Endeavour gas discoveries respectively, to Egdon until 31 May 2020, subject to securing a farm-in agreement by 31 January – a condition fulfilled by the Shell farm-in. The other condition was demonstrating that the licensees were on track to deliver a future program of 3D seismic data acquisition across both licences. With both conditions now fulfilled, Egdon said on Monday that the initial term of the licences shall be extended to 31 May 2024 with amended work obligations. Namely, 400 square kilometres of 3D seismic must be acquired in P1929 and P2304 by 31 May 2021 or the operator will be forced to relinquish the licences. Also, one well in either P1929 or P2304 must be drilled to a depth of 1,700 metres true vertical depth subsea (TVDss), or 75 metres below the Base Permian Unconformity by 30 November 2022.