VSA Morning Flow Test, 18/05/21
Egdon Resources (LON:EDR)
Egdon Resources (LON:EDR) has announced the very positive news that it has now received the all the remaining consents necessary for the commencement of the proppant squeeze operation at the Wressle oil field. This will enable the company to optimise oil production and increase it to the stable target level of 150bpd net to EDR.
This higher run rate will result in a dramatic production increase against the first half of the financial year which averaged 92bopd for the whole company. The significance of Wressle to EDR has been known for sometime and this is a major step forward for the company. The technical risk associated with executing the proppant squeeze appears limited, in our view, given that since production commenced in January as an extended flow test rates have increased with no water present. The company expects target production to be achieved in June 2021.
We reiterate our Buy recommendation and 21p target price.
Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]
#Indicates VSA house stock.
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