Egdon’s interim results confirmed that production is on track to meet FY16 guidance of 180boe/d with 204boe/d delivered in the first half. In the short-term, investor focus is likely to remain on shale gas planning and development of the Wressle oil discovery. Planning decisions for Third Energy’s KM-8 and Cuadrilla’s Roseacre Wood and Preston New Road shale appraisal sites are expected over the next six months. Planning approvals potentially pave the way for exploration and appraisal at Springs Road, an asset in which Egdon has a 14.5% carried interest. In our view, Springs Road is ideally located to test thick, gas-mature Bowland shale in the prospective Gainsborough Trough and remains a valuable asset within the Egdon portfolio. We publish updated 2016 financial forecasts and a conventional RENAV of 22p/share. We also include 22p/share for unconventional acreage based on recent transaction values.
