The sale includes the transfer to Egdon of EnCore’s interests in nine UK and two French onshore licenses and an interest in the Ceres gas field on the UKCS. Egdon is expected to pay GBP100,000 to EnCore upon completion of the sale of the subsidiary holding the French licenses.
The assets sale also includes: establishment of a technical services agreement under which EnCore will provide Egdon with technical, commercial and accounting services, to be charged on a day-rate basis; and provision by EnCore to Egdon of a loan facility of up to GBP1.5m, available for a two year period from completion of the transactions, at an interest rate of 10% or LIBOR plus 5% if greater.
The transfer to Egdon of EnCore’s UK onshore licenses and interest in Ceres is subject to approval by Egdon shareholders; the regulatory approvals from the Department of Energy and Climate Change (DECC); and approval from the joint venture partners on each license. In addition, French regulatory consent will be required for the sale of the subsidiary holding Encore’s French licenses.
Alan Booth, CEO of EnCore, said: “Our shareholding in Egdon will place a tangible and transparent valuation on parts of our overlooked asset base. Egdon is an experienced and committed onshore player, and, as a result of this transaction, we believe that Egdon now has the capacity and resources to grow into a significant onshore E&P company.
“As Egdon’s largest shareholder, EnCore will continue to actively support and assist in Egdon’s ambitious growth plans.”
