Edgon Resources PLC will progress assignment of UK offshore license interests and operatorship to Shell UK Ltd. following approval by Oil & Gas Authority to extend P1929 and P2304 license terms and work obligations (OGJ Online, Jan. 21, 2020).
The initial term of the licenses will be extended to May 31, 2024 subject to fulfilling two commitments. By May 31, 2021, the companies acquire 400 km2 of 3D seismic in P1929 and P2304 or relinquish the licenses. By Nov. 30, 2022, the companies undertake to drill one well in either P1929 or P2304 to a depth of 1,700 m TVD subsea, or 75 m below the Base Permian Unconformity, or relinquish the licenses.
Following completion of the farm-in, Egdon will retain a 30% interest in the licenses. Under the terms of the agreement, Shell will pay 85% of the costs of the acquisition and processing of the 3D seismic survey covering both the Resolution and Endeavour gas discoveries. The carry on the acquisition costs will be capped at $5 million gross, beyond which Egdon would pay 30% of the survey costs. Furthermore, Shell will also pay 100% of all studies and manpower costs through to the well investment decision on the licenses.
