Egdon Resources - 2020 focus on conventional assets

Egdon Resources’ recently announced results showed that FY19 production increased by 117% to 182boepd, largely driven by the Ceres gas field. Revenue increased to £2.2m from £1.2m in FY18 and the company remains debt-free following the c £2m June 2019 capital raise. In FY19, Egdon made significant progress at its unconventional Springs Road play, with the Bowland Shale sharing key characteristics with North American shale. However, in November 2019 the UK government announced a moratorium on hydraulic fracking, bringing all UK shale appraisal to a halt. Egdon is working closely with the Oil and Gas Authority (OGA) and other regulators to demonstrate that it is possible to operate fracking safely at Springs Road. Our updated RENAV decreases from 11.5p/share to 10.8p/share, based on FY19 results, rolling forward the NAV and, to a lesser extent, updated for FX rates and reduced short-term commodity prices.