Egdon Resources plc Provides an Update on the Impact of COVID-19 on the Business and an Update on Current Trading; Announces Production Remains Within Guidance for the Full Financial Year Ending 31 July 2020
As announced on 26 February 2020, production during the six months ended 31 January 2020 was 178 barrels of oil equivalent per day ("Boepd") (H1 2019: 164 Boepd). Revenue during the six months to 31 January 2020 was £0.675 million (H12019: £1.21) which reflects the lower gas prices seen through the winter of 2019/20.
Production remains within guidance of 130-140 Boepd for the full financial year (ending 31 July 2020). The coronavirus pandemic and the resultant international actions have adversely impacted worldwide oil demand which has largely contributed to the current low oil price environment. In common with its peers, the current late field life production is unprofitable at these current prices and the company are reducing costs wherever possible. Given the current reduction in predicted oil and gas forward prices, non-cash impairments will be made in its Interim Results on a small number of assets. These impairments are expected to be of the order of c.£2.5-3.0 million out of total non-current assets of £31.94 million. The Company is focussed on reducing costs and expenditure and concentrating on progressing key near term cash generative projects such as Wressle. The company will continue to keep future activity under review in light of the current circumstances and are positioning the Company for growth once normality returns to the economy and oil markets.