Egdon Resources’ latest acquisition will help to boost its revenues by giving it’s a larger stake in the Avington oil field in southern England.
The purchase of Heyco Energy Group’s interests increases Egdon’s stake in Avington, which is in the PEDL069 licence area, from 20% to 36.67%.
Egdon will also increase its stake in the adjacent PEDL070 licence area from 36.67% to 66.67%. This could contain a northerly extension to the Avington field, which is currently producing around 300 barrels of oil a day.
Egdon is issuing 6.86m of its shares to Heyco and is granting it a net profit interest in production from the licences. The NPI will range from 5% and 10% of Egdon’s net revenues after allowable costs.
The deal has to be agreed by the Secretary of State for Business Enterprise and Regulatory Reform. The share price jumped 2.75p to 10.75p after the announcement, which values Egdon at £7.38m.
Egdon increased its revenues from £41,000 to £1.21m in the year to July 2008, but the loss also increased from £365,000 to £2.38m. Net cash was £2.17m.
Much of the increase in revenues came from the Keddington field where, earlier this month, Egdon sold a 10% stake to Aim-quoted Nautical Petroleum for £260,000.
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