Shell has completed a farm-in agreement with Egdon Resources in respect of offshore licences P1929 and P2304, which contain the Resolution and Endeavour gas discoveries off the UK.
Shell signed th e farm-in agreement to acquire a 70 per cent of Egdon Resources’ P1929 and P2304 licenses back in January 2020.
It was agreed that Shell would also be appointed as the licence operator.
In July 2020, the UK’s Oil and Gas Authority (OGA) granted extensions of the initial term of the licences to Egdon Resources to 31 May 2024 with amended work obligations.
In an update on Tuesday, Egdon said that the OGA has approved the transfer of a 70 per cent interest and operatorship in both licences and the associated documentation including joint operating agreements in respect of both licences has now been executed.
Egdon retains a 30 per cent interest in the licences. Under the terms of the farm-in agreement, Shell will pay 85 per cent of the costs of the acquisition and processing of the 3D seismic survey covering both the Resolution and Endeavour gas discoveries.
Under the terms of the licences, this work needs to be completed by 31 May 2021. The carry on the acquisition costs will be capped at $5 million gross, beyond which Egdon would pay 30 per cent of the survey costs.
Furthermore, Shell will also pay 100 per cent of all studies and manpower costs through to the well investment decision on the licences.
Mark Abbott , Managing Director of Egdon Resources, said: “We are delighted to have completed the transfer of interest and operatorship to Shell in respect of these important, and potentially valuable, licences for Egdon. The focus will now be on progressing appraisal activity on the Resolution and Endeavour gas discoveries.
“The first part of this activity will be the acquisition of a marine 3D seismic survey during Q1 2021. We look forward to building on our good working relationship with Shell and benefiting from their substantial worldwide operational experience and expertise”.