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Egdon Resources

  • BY: Andrew Hore |
  • POSTED: 14/11/2011 |

Onshore oil and gas company Egdon Resources reported a jump in profit to £4.08m last year but that was due to the profit on disposal of a subsidiary.

Egdon sold a package of French oil licences to eCorp for £4.5m – a profit of £4.34m. This was just before France banned hydraulic fracking. Egdon still has interests in conventional gas targets. The main focus is Audignon, where Egdon has a 33.4% interest.

Revenues increased from £1.25m to £2.38m in the year to July 2011 and the underlying loss rose from £153,000 to £261,000.

Although Egdon is loss-making it is cash generative. Cash flow from operations improved from £161,000 to £202,000. Egdon spent £3.2m on exploration and development last year and it could spend twice as much this year as it tries to build up its resources. There is £3.69m in the bank and the business will generate more cash this year.

Production averaged 130 barrels/day but hit 420 barrels/day in July. Reduced production levels at Kirkleatham mean that the average for this year is going to be lower than previously expected at around 400 barrels/day.

Last year, Egdon bought assets from EnCore Oil, which took a near-30% stake in return. Premier Oil is taking over EnCore and it is uncertain whether Premier will want to keep this stake. 

At 13p a share, Egdon is valued at £17.7m. 

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