On Monday, Egdon Resources (LSE:EDR) reported positive drilling results from the Springs Road-1 (SR-01) well. The firm holds a 14.5pc interest in the license PEDL140 containing the SR-01 well which is operated by IGas. The companies report that a ‘hydrocarbon bearing shale sequence of over 250 metres’ was encountered with ‘Significant gas indications’ observed.
Igas recovered 150 metres of shale core for analysis and has performed extensive wireline logging and expects to give a further update on the analysis in the second quarter of this year.
The well is located in the Gainsborough Trough play in the East Midlands, UK and contains an estimated 20 trillion cubic Feet (Tcf) of net undiscovered das in the shale with further tight gas potential. Egdon’s interest is carried over in the second and third wells to be drilled at Springs Road.
The news is much welcomed after a disappointing drill at Biscathorpe determined the targeted Basal Westphalian Sandstone was poorly developed. Egdon did say it would suspend the well retaining the option for a potential future side-track. However, this is unlikely to be easy, with any further drilling requiring Egdon to once again jump through various regulatory hoops including environmental consents and planning permission. These processes have thwarted Egdon’s attempts to receive permission to progress its Wressle oil discovery. A third application for the development of the field was rejected by the Council’s planning committee last November, but in January the firm was granted a year-long extension to the Wressle license giving it further time to address issues raised by the council.
Mark Abbott, Managing Director of Egdon Resources plc, said:
“These initial results from the Springs Road-1 well are highly encouraging for both PEDL140 and the wider potential of Egdon’s extensive licence portfolio in the East Midlands. We now look forward to the results from the drilling of the deeper sequences in the Springs Road-1 well over the coming weeks and the detailed analysis of the core and log data acquired to date in the coming months. However, these positive results from Springs Road-1 when added to those from Tinker Lane-1 appear to validate our strategic focus on the Gainsborough Trough where the Company holds interests in 82,000 net acres.
It is clear from these and other recent results that UK onshore gas has the potential to reduce the UK’s increasing dependency on gas imports over the coming decades, with both economic and environmental benefits to the country.”