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Research: Energy & Resources
Egdon has provided an update on its Wressle development in north Lincolnshire. Given the current macroeconomic environment, the company has updated its economic model. Management estimates that the project is still economically robust at the current oil price with an NPV10 break-even Brent price of $17.62/bbl. This is broadly in line with our own analysis using company guidance. First oil remains on track for H220 and the forward development plan comprises a number of key stages, with progress to date on discharging the planning conditions, finalising designs, tendering and procurement of materials, equipment and services and finalising all health, safety and environmental (HSE) documentation and procedures.
Written by
Egdon Resources |
Wressle development robust at current prices |
Wressle update |
Oil & gas |
18 March 2020 |
Share price performance
Business description
Analysts
Egdon Resources is a research client of Edison Investment Research Limited |
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Egdon has provided an update on its Wressle development in north Lincolnshire. Given the current macroeconomic environment, the company has updated its economic model. Management estimates that the project is still economically robust at the current oil price with an NPV10 break-even Brent price of $17.62/bbl. This is broadly in line with our own analysis using company guidance. First oil remains on track for H220 and the forward development plan comprises a number of key stages, with progress to date on discharging the planning conditions, finalising designs, tendering and procurement of materials, equipment and services and finalising all health, safety and environmental (HSE) documentation and procedures.
Year end |
Revenue |
PBT* |
EPS* |
EBITDA |
Net cash |
Operating |
07/18 |
1.2 |
(2.0) |
(0.8) |
(2.2) |
2.7 |
(1.6) |
07/19 |
2.2 |
(1.7) |
(0.2) |
(0.6) |
1.6 |
(0.9) |
07/20e |
1.9 |
(0.9) |
(0.8) |
(0.6) |
0.2 |
(0.1) |
07/21e |
4.1 |
(1.5) |
(0.8) |
1.5 |
1.0 |
2.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The Wressle development was granted planning consent on appeal on 17 January 2020. The planning inspector also allowed Egdon's application for costs against North Lincolnshire Council and the company confirmed that this has been submitted. In our previous note, we estimated Wressle costs of development to be c £0.8m net to Egdon, for which the company should still be funded even under the current low oil price environment.
Beyond the planning, procurement and procedures phase, the first work onsite will be the installation of groundwater boreholes and the establishment of baseline conditions through monitoring. This will be followed by the reconfiguration of the site, the installation and commissioning of surface facilities and sub-surface operations, before production can commence as planned in H220.
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Brighter initiated activity on multiple fronts following the issue of CE marks for its lead product, Actiste. It acquired Nectarine Health, a Swedish healthtech start-up, to complement its other assisted care solutions acquisition, Camanio. Brighter also entered into a strategic partnership with Accumbo, a digital healthcare provider, to support the visibility of Actiste in the Swedish market, one of Brighter’s target markets. Also, to support commercialisation activities in the near term, the company raised SEK191m via a rights offering.