Egdon Resources has signed a conditional sale and purchase agreement to acquire Alkane Energy’s shale gas interests in certain UK petroleum exploration and development licences.
The onshore shale gas business and assets being acquired include ten licences, mostly in the East Midlands basin. Egdon will issue 40 million new ordinary shares of £0.01 each to Alkane in exchange for the acquisition of the licence interests.
The acquisition will result in an almost doubling of Egdon’s assessed prospective shale gas acreage to 140,176 acres and a combined mean undiscovered gas initially in place independently estimated at about 28 trillion cubic feet of gas. The company said that it will have a significant acreage position in the core of the Gainsborough Trough shale gas play.
The licence interests will be divided on a horizontal axis, with Egdon acquiring a 100% stake in the lower interest which features the shale gas potential, and Alkane retaining a 100% interest in the upper interest.
Alkane Energy CEO Neil O’Brien said that the company believes that the agreement with Edgon will create an entity which can bid for further acreage in DECC’s 14th Onshore Licensing Round.
"This is a very important strategic agreement for Alkane. It will enable us to benefit from the potential upside from the development of shale gas in the UK whilst we remain focused on growing our core business," O’Brien said.
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By GlobalDataEgdon focuses on onshore exploration and production in the hydrocarbon-producing basins of the UK and France. The company, which currently holds interests in 27 licences in the UK and France, has an active programme of exploration, appraisal and development within its oil and gas assets portfolio.
