Egdon Resources - INEOS acquires interest in Egdon core shale area

INEOS has completed the acquisition of Total E&P’s interests in a number of Gainsborough Trough area UK licences operated by IGas in which Egdon has equity interests. Total’s partial exit from the UK shale sector and INEOS’s increasing dominance as the largest holder of UK shale acreage will raise questions over integrated oil sector appetite. Nevertheless, INEOS’s commitment to the sector should ensure that planning applications, seismic surveys and exploratory wells are expedited. With INEOS taking on Total’s cost-carry and 14th round obligations we estimate that the implied transaction values range from $600/acre to $2,000/acre.