Wrestling with Wressle

Planning complications at Wressle are a setback for Egdon, affecting short-term production expectations. We expect Egdon to return with revised planning documentation to address local council planning concerns over the next couple of months; nevertheless, we expect Wressle first oil to be pushed back by up to 12 months. Our production expectation for FY17 has been reduced from 165boe/d to 110boe/d as a result. Our updated core 2P NAV (including cash and net of G&A) falls from 3.7p/share to 3.1p/share. However, our contingent resource and risked exploration valuation is little changed at 17.8p/share (from 18.5p/share). We include an indicative value per acre-based 25.7p/share valuation for shale acreage.