Egdon Resources — Update 24 May 2016

Egdon Resources (AIM: EDR)

Last close As at 21/11/2024

GBP0.04

0.00 (0.00%)

Market capitalisation

25m

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Research: Energy & Resources

Egdon Resources — Update 24 May 2016

Egdon Resources

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Energy & Resources

Egdon Resources

KM-8 planning approval

Company update

Oil & gas

24 May 2016

Price

10p

Market cap

£22m

Net debt (£m) at 31 January 2016

5.3

Shares in issue

221.3

Free float

46%

Code

EDR

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

Business description

Egdon Resources is an AIM-listed onshore oil and gas exploration company. The group has conventional and unconventional assets in the UK and France.

Analysts

Sanjeev Bahl

+44 (0)20 3077 5700

Ian McLelland

+44 (0)20 3077 5756

Egdon Resources is a research client of Edison Investment Research Limited

Yesterday North Yorkshire County Council approved planning permission for Third Energy’s appraisal of Kirby Misperton-8 (KM-8) in the Cleveland Basin. We understand that work to hydraulically fracture and test KM-8 could be carried out as early as Q4 CY16. The read-across to Egdon is two-fold: first, planning success at KM-8 should help pave the way for planning approval at IGas-operated Springs Road where Egdon retains a 14.5% carried interest in a two-well exploration programme. Second, appraisal success could be a positive read-across for Egdon’s unconventional gas potential at the Cloughton tight gas field to the North East of KM-8 as well as Teesside to the North. Please see our report of 16 May 2016 for further details and a full breakdown of our Egdon valuation.

Year end

Revenue (£m)

EBITDA
(£m)

PBT
(£m)

Debt
(£m)

Net cash / (debt) (£m)

Capex
(£m)

07/13

3.3

0.8

(1.1)

0.0

2.0

(1.3)

07/14

3.0

0.3

(1.5)

0.0

9.7

(2.8)

07/15

2.1

(2.9)

(4.5)

0.0

5.2

(3.3)

07/16e

1.8

(1.2)

(3.1)

0.0

2.8

(2.4)

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments

Planning applications up next: A planning appeal decision for Cuadrilla-operated shale gas exploration sites Roseacre Wood and Preston New Road in Lancashire is expected on 4 July 2016. Key planning objections include visual impact, noise and traffic. Cuadrilla has since proposed modifications to mitigate the potential impact. Springs Road: The IGas-operated Springs Road site does not appear to be contentious from a planning perspective with a planning recommendation and committee decision expected over the summer. Ease of site access, distance from areas of high population density and access to a decommissioned missile facility, provide the foundations for a well pad, making the selected site well suited for shale gas exploration.

Egdon valuation: Our valuation stands at 3.4p/share for core production and development assets, including cash and net of G&A, and 18.6p/share for risked E&A. We also include net unconventional acreage at 22p/share.

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Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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