VSA Capital Market Movers – Egdon Resources

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VSA Morning Flow Test, 26/08/20

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Egdon Resources (AIM:EDR)#

Egdon Resources (AIM:EDR) has provided confirmation that it has received full proceeds from the confidential settlement between the company and JV partner Humber Oil & Gas Limited. This announcement concludes the dispute under the Joint Operating Agreement at Biscathorpe (PEDL253) where EDR holds a 35.8% operated interest upon implementation of the terms of the Settlement Agreement. This enables management’s time to be fully focused on advancing the project. As previously announced, the licence demonstrates an NPV10 of £55.6m on an unrisked 100% ownership basis with the project having a low estimated breaking even at US$18.07/bbl.

Our valuation of the Biscathorpe asset at 2.8p/sh. continues to demonstrate that EDR’s conventional portfolio remains deeply discounted by the market and now the settlement has concluded, we look forward to further progress and realisation of the asset’s upside.

We reiterate our target price of 35.2p/sh. and Buy recommendation.

Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]

Samuel Green, Equity Analyst | T: +44 (0)20 3005 5010 | E: [email protected]
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All disclosures and supporting charts can be found in the PDF version.

VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]


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