Egdon Resources

LN: EDR

£9.6m market cap

3.15p last close

Egdon Resources is an AIM-listed onshore oil and gas exploration company. The group has conventional and unconventional assets in the UK.

Investment summary

Egdon Resources retains several value catalysts that encompass both its conventional and unconventional assets and include exploration and appraisal as well as the Wressle development (subject to planning consent). In September, IGas Energy provided further details on the results from the Springs Road-1 core analysis suggesting that key characteristics of the Bowland Shale in the Springs Road-1 well compare to commercial shale operations in North America. The core results indicate a mature, organic content-rich source rock with good porosity confirming favourable gas resource density and low clay content. The joint venture will continue working on the basin model to better delineate the resource potential and refine the appraisal programme. Our RENAV currently stands at 11.5p/share. The valuation of shale resource remains uncertain but in our view has the potential to be worth a risked c 100p/share based on current expectations of well cost, type curves and forward gas prices.

Y/E Jul
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 1.0 (1.2) (2.2) (0.7) N/A N/A
2018A 0.8 (2.2) (1.7) (0.8) N/A N/A
2019E 2.2 (0.5) (2.1) (0.2) N/A N/A
2020E 2.7 0.1 (1.8) (0.8) N/A 13.9
Industry outlook

The UK government’s stance towards shale varies by party. However, current central government appears to be supportive of unconventional gas development, attracting sector investment from the likes of Centrica and Ineos.

Last updated on 19/11/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (£m) 0.6
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (48.6) (35.7) (56.5)
Relative* (49.7) (37.5) (58.7)
52-week high/low 8.2p/2.8p
*% relative to local index
Key management
Philip Stephens Chairman
Mark Abbott MD

Content on Egdon Resources