Reading’s Egdon Resources completes Aurora acquisition

Reading-based Egdon Resources has completed the acquisition of Aurora Production (UK) Limited.

In the latter part of December last year, the two companies signed a conditional agreement which would see Egdon acquiring the entire issued share capital of Aurora, a private company which holds interest in two oil field licenses.

These are an 18.5 per cent interest in the Egdon operated PL090, containing Waddock Cross oil field, and IGas operated PEDL070, which contains the Avington oil field. Both of these are currently shut-in, which means they are not currently producing oil, and Egdon is working to resume operation.

Egdon estimates the transaction adds approximately 0.614 million barrels of Best Estimate Contingent and Prospective Resources of oil to its resource inventory.

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The agreement sees Egdon assuming all of Aurora’s ongoing liabilities on those licenses, including all abandonment liabilities. Reflecting those liabilities the vendor, Aurora Petroleum Limited, has paid Egdon a cash sum of £288,000, minus interim period costs. Of production on the licenses resumes profitability, Aurora will be reimbursed the cash sum.

The commercial date of the transaction is 30 September 2022. Aurora Production’s approximately £90 million of upstream ring fenced tax losses should be available to offset tax on future profits.

Mark Abbott, Managing Director of Egdon said: "We are pleased to have completed this acquisition, which builds on our existing interests in the Waddock Cross and Avington oil fields. Both assets have active plans in place to rejuvenate oil production. 

“The acquisition therefore adds potential for near-term incremental production, adds to our resource base and delivers substantial tax losses that may be utilised to offset future taxes."

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