EGDON Resources, said yesterday it had agreed to acquire EnCore Oil’s stakes in nine onshore UK licences, two onshore French licences and a 10% interest in the Venture Production-operated Ceres gas field in the southern North Sea.
The oil and gas operator with interests principally onshore in England also said it had conditionally raised £2million before expenses through a placing of shares with investors.
Egdon said the deal would give it near-term cash flow from Ceres and an increased interest in the Kirkleatham gasfield development later in 2010. It added that it would significantly expand its exploration prospects.
EnCore gains a fraction less than 30% of shares in Egdon plus £100,000 in cash, valuing the assets changing hands at £5million. In addition it has agreed to provide Egdon with access to an unsecured loan of up to £1.5million for the exploration and development activities of Egdon and its affiliates.
EnCore chief executive Alan Booth is said to be likely to join Egdon’s board as a non-executive director.
Mark Abbott, Egdon’s managing director, said: “The acquisition of these assets from EnCore provides an excellent strategic fit with Egdon’s existing portfolio.”
Mr Booth said: “Our shareholding in Egdon will place a tangible and transparent valuation on parts of our overlooked asset base. As Egdon’s largest shareholder, EnCore will continue to actively support and assist in Egdon’s ambitious growth plans.”