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LONDON (Alliance News) - Planning permission has been granted for drilling and any testing that follows at the Biscathorpe-2 exploration well in Lincolnshire, England licence PEDL253, according to Egdon Resources PLC on Monday.
In a statement, Egdon said that Lincolnshire County Council gave its approval at a planning and regulation committee meeting earlier on Monday.
"The Biscathorpe Prospect is a large anticlinal structure mapped on reprocessed 3D seismic data. Oil was discovered but not tested in a thin Basal Westphalian/Namurian Sandstone unit in the Biscathorpe-1 well drilled by BP in 1987 on the crest of the structure," Egdon said.
"The sand unit is predicted to thicken away from the crest of the structure and there is also potential for stratigraphic trapping in the west which if present could increase the expected total prospective reserves from an Egdon assessed Best Estimate case of 14 mmbls up to a High case of 41 mmbls. The same sand unit is the producing reservoir in the Egdon operated Keddington oil field," Egdon added.
Egdon Resources UK Ltd, the operator of the well, has a 54% interest in the well. Montrose Industries Ltd's interest stands at 36%, while AIM-listed Union Jack Oil PLC holds a 10% interest. Under the terms of a farm-in agreement, Egdon will be carried by Union Jack for 6% of the Biscathorpe-2 well costs making its paying interest 48%.
"The well will expose Egdon to significant resource potential and we will now work through the various planning conditions to be in a position to drill the Biscathorpe-2 well later in 2015. During the current challenging low oil price environment for our industry, the low capital, development and operating costs of onshore UK operations means that prospects like Biscathorpe remain commercially attractive," Egdon Managing Director Mark Abbott said.
Egdon shares were down 2.4% at 8.05 pence on Monday afternoon, while Union Jack shares were up 1.0% at 0.202p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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