Egdon Resources

LN: EDR

£12.9m market cap

4.25p 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). IGas has released an initial update on drilling activity at Springs Road, with over 250m of hydrocarbon bearing shale encountered. Pressurised core samples were shown to release gas at atmospheric pressure. We re-visited our conventional valuation post the interim results and Schlumberger’s resource assessment for Resolution. As a result, our RENAV was reduced by 1.2p/share to 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 18.7
Last updated on 24/07/2019
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 24/07/2019
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 (6.6) (28.7) (55.7)
Relative* (8.4) (28.8) (54.8)
52-week high/low 10.3p/4.2p
*% relative to local index
Key management
Philip Stephens Chairman
Mark Abbott MD

Content on Egdon Resources