Egdon Resources

LN: EDR

£17.3m market cap

6.65p last close

Egdon Resources is an AIM-listed onshore oil and gas exploration company. The group has conventional and unconventional assets in the UK and access to over 188,000 net shale acres.

Investment summary

Basal Westphalian sandstones targeted at Biscathorpe-2 were found high to prognosis and poorly developed. Elevated gas readings and oil shows in the Dinantian Carbonate provide indication of an effective petroleum system and Egdon sees the potential for a better developed reservoir to the north and north-east of Biscathorpe-2, a potential target for a future side-track. Our last published conventional asset value for Egdon was 12.7p/share and included 3.6p/share of risked value for Biscathorpe-2, which we expect to remove. Valuation of Egdon’s net shale resource (188,000 net acres) remains uncertain but, in our view, has potential to be worth risked c 100p/share based on the current expectation of well cost, type curves and forward gas prices, assuming a supportive political and planning backdrop.

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 3.2 0.1 (0.6) (0.2) N/A 27.2
2020E 4.2 (0.1) (2.0) (0.8) N/A 42.0
Last updated on 21/02/2019
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 21/02/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (£m) 0.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (17.4) (12.5) 9.0
Relative* (19.6) (14.1) 11.1
52-week high/low 12.5p/5.7p
*% relative to local index
Key management
Philip Stephens Chairman
Mark Abbott MD

Content on Egdon Resources