8.55am: Oil company boosted by regulatory approval
Egdon Resources PLC (LON:EDR) has seen its shares bubble higher after a positive update from its Wressle oil field in North Lincolnshire.
It has received the necessary consents to start a proppant squeeze operation – a hydraulic fracturing process – to optimise oil production from the Ashover Grit reservoir, one of three productive reservoirs it has been testing.
Its Wressle-1 well has been on 24 hour test production since late January with the oil produced then being transported by road tanker to the Phillips 66 Humber refinery and sold under Egdon’s existing oil sales contract.
The company said production rates had exceeded its expectations, with high quality free flowing oil being produced and no water present. The well will continue operating on test production until the proppant squeeze operation is started.
Egdon managing director Mark Abbott said: “We are delighted to have received all the required regulatory consents for the proppant squeeze operation at Wressle. When successfully completed, this will realise the full potential from the Ashover Grit reservoir and is expected to increase Egdon’s net production to 150 barrels of oil per day at a time of increasingly strong oil prices leading to a step change in our cash flow.”
Egdon is 18.75% or 0.3p higher at 1.9p while Union Jack Oil PLC (LON:UJO), which has a 40% economic interest in the Lincolnshire licences has added 8.14% or 2.85p to 37.85p.
Union Jack executive chairman David Bramhill said: “The proppant squeeze operation is the final phase of achieving our targeted oil production level and generating optimum cash flows from the Ashover Grit reservoir.”