Preliminary Results for the Year Ended 31 July 2011 & Business Review

Preliminary Results for the Year Ended 31 July 2011 & Business Review

Egdon Resources plc Preliminary Results for the year ended 31 July 2011 & Business Review Preliminary Results for the year to 31 July 2011 Egdon Overview • An AIM listed oil and gas exploration and production company focused on onshore UK and mainland Europe • A balanced portfolio of production, development, appraisal and exploration projects positioning the Company for future growth • Extensive European portfolio= 29 Licences in UK and France • Approved operator in UK and France • Shares Currently in issue: 130,969,094 • Market Cap : c. £17 million • Oil & Gas Reserves and Resources Category As at 31/07/2011 As at 31/07/2010 Proven & Probable (mmboe) 2 2 Best Estimate Contingent Resources (mmboe) 4 5 Best Estimate Prospective Resources (mmboe) 248 289 * Company Numbers Slide 2 Preliminary Results for the year to 31 July 2011 Egdon Resources plc - Vision & Strategy “The aim of the Group is to create shareholder value by building a profitable and material full cycle exploration, production and energy business with a focus on onshore European operations” Strategy: The Company will look to increase shareholder value by: • Growing near-term revenues through investment in production, development and appraisal projects • A focus on fewer, higher impact exploration opportunities • Broadening and strengthening the asset and opportunity base of the Group through licence applications, targeted acquisitions and innovative deal making • Proactively managing the portfolio to maximise returns and manage risk • Looking to extract shareholder value from emerging non-conventional hydrocarbon plays Slide 3 Preliminary Results for the year to 31 July 2011 Financial Highlights • Profit for the year £4.08m (31 July 2010: £0.24m) • Revenues during the period up 90% to £2.38m (31 July 2010: £1.25m) • Exceptional profit on disposal of subsidiary company and assets of £4.3m (31 July 2010: £0.4m) • Basic earnings per share of 3.12p (31 July 2010: 0.29p) • Equity as at 31 July 2011 of £20.17m (31 July 2010: £16.03m) • Net current assets as at 31 July 2011 of £3.28m (31 July 2010: £1.49m) Summary Consolidated Statement of Comprehensive Income Audited year Audited year Summary Statement of Financial Position Audited 31‐ Audited 31‐ ended 31‐July ‐ ended 31‐July‐ July‐2011 July‐10 2011 10 £'000 £'000 £'000 £'000 Non Current Assets Revenue 2,379 1,252 Intangible assets 7,105 7,033 Cost of sales ‐891 ‐65 Property, Plant & equipment 10,721 8,422 Cost of sales ‐ exploration costs written off and pre‐licence costs ‐1,207 ‐819 Total non‐Current Assets 17,826 15,455 Gross Profit 281 368 Current Assets Admin Expenses ‐687 ‐668 Inventory 10 0 Other operating income 226 175 Trade and receivables 2,258 1,039 Gain/loss on sale of propert, plant & equipment ‐1 389 Cash & Cash Equivalents 3,691 2,030 Gain on sale of subsidiary 4,338 0 Available for sale financial instruments 50 50 Finance Income 42 1 Assets held for sale 0 21 Finance cost ‐122 ‐28 Total Current Assets 6,009 3,140 Profit before taxation 4,077 236 Taxation 0 ‐1 Current Liabilities ‐2,725 ‐1,648 Total Comprehensive Income for the period 4,077 235 Net Current Assets 3,284 1,492 Basic Profit per share 3.12 p0.29 p Total Assets less current liabilities 21,110 16,947 Non‐Current Liabilities Provisions ‐940 ‐916 Net Assets (Equity) 20,170 16,031 Drilling operations at Keddington-3, Louth Lincolnshire Slide 4 Preliminary Results for the year to 31 July 2011 Operational Highlights • Production up 73% to 46,919 barrels of oil equivalent (2010: 27,056 boe) • Kirkleatham Gas Field brought on production in April 2011 • Oil Discovery made at Markwells Wood-1 to be tested during November 2011 • Drilled successful sidetrack at Keddington oil field in April 2011 • Portfolio of 29 licences in UK and France as at 31 July 2011 (2010: 34) = asset rationalisation in line with strategy Slide 5 Preliminary Results for the year to 31 July 2011 Corporate Highlights • Completed the acquisition of EnCore (E&P) Limited • Farmed-out shale gas test well in PEDL139 and PEDL140 • Completed the sale of Egdon Resources (New Ventures) Ltd for cash consideration of £4.5 million • Acquired PEDL180 and PEDL181 from Valhalla Oil and Gas Limited • Sold a 10% interest in Avington oil field for cash consideration of £400,000 Slide 6 Preliminary Results for the year to 31 July 2011 UK Licences & Prospects • Strategy of rationalising and improving Egdon’s portfolio = Relinquished 7 UK licences during period (write down of £594K & reduction of 40 mmboe in Prospective Resources) • All Egdon’s licences in proven producing areas • Egdon will be active across its entire UK portfolio, however, there will be 2 main focuses in the next 18 months: 1. Developing oil prospects and growing production in the East Midlands and 2. Exploiting gas in Northern England and Offshore • Reinvestment of cash resources into exploration/appraisal during coming period • Drilling of up to 12 wells over the next 18 months targeting 33 mmboe (Net Egdon Best Estimate Prospective Resources) • Possible farm-out of part of programme to manage risk Slide 7 Preliminary Results for the year to 31 July 2011 Developing Oil Prospects & Growing Production in the East Midlands • Production = Keddington, Dukes Wood/Kirklington • Appraisal = Nooks Farm, Broughton • Exploration = multi-well drilling campaign planned starting in mid-2012 • Targeting 15 mmbo (Net Egdon Best Estimate Prospective Resources) in 5 prospects • Louth Prospect • Biscathorpe Prospect • North Kelsey Prospect • Wressle Prospect • Burton on the Wolds • Gainsborough Deep shale-gas test • Additional prospects identified: • North Somercotes • Eakring North • CBM Potential Slide 8 Preliminary Results for the year to 31 July 2011 Keddington Oil Field PEDL005 (remainder): Egdon 75% and operator • Egdon looking to maximise value of “greater Keddington area” • Keddington-4 drilled in April 2011 – 120 m horizontal section – production of c. 50 bopd and 200,000 cfg/d • Field review should result in upward revision to field reserves from current 0.3 mmbo • Production choked back to limit gas flaring whilst plans are finalised for electricity generation and export = new revenue stream – location and cost of connection is key issue being addressed • Target production in short term of 125-135 bopd (Net Egdon c.100 bopd) • Louth Prospect – 3D defined prospect contiguous with Keddington = 1.25 mmbo prospective resources (Net to Egdon) • Planned as initial well in E. Mids multi-well programme Drilling operations at Keddington-4 Slide 9 Preliminary Results for the year to 31 July 2011 Eakring/Dukes Wood/Kirklington Eakring/Dukes Wood/Kirklington: PEDL’s 118 & 203 – Egdon 65% operated • To be jointly developed as a single production unit high water- cut production from both Kirklington-3z and Dukes Wood-1 • Dual completion of DW-1 well to produce from Ashover Grit-5 and inject water into the “SAC” unit • Planning received, other consents being sought for 2012 production start-up at c. 40 bopd (net Egdon 26 bopd) • Further independent drilling targets at Eakring and Dukes Wood including un-produced highs – e.g. Eakring North Lead DukesDrilling Wood operations Statue commemorating at Markwells Wood-1, the US December Roughnecks 2010 Slide 10 Preliminary Results for the year to 31 July 2011 Broughton/ Wressle / North Kelsey • 49 km2 3D survey planned for late 2011 to determine final well locations on one of both prospects • Area located between Crosby Warren oil field and Brigg oil well Broughton Prospect: PEDL182 – Egdon 33.33% operated • Broughton-B1 flowed oil (40 bopd) from well drilled by BP in 1984 • Up-dip potential identified with Net Egdon best estimate prospective resources of 1.0 mmbo • Previous drill site still exists • Additional reservoir targets • Net Egdon Best Estimate Prospective Resources :1.0 mmbo Wressle Prospect: PEDL 180– Egdon 33.33% operated • Up-dip potential identified • Previous drill site still exists • Net Egdon Best Estimate Prospective Resources: 1.3 mmbo North Kelsey Prospect: PEDL241 - Egdon 50% operated • 3D defined prospect (experimental 3D volume) • Net Egdon Best Estimate Prospective Resources: 3.14 mmbo Tessla-IMC vibroseis tractors in operation - UK Slide 11 Preliminary Results for the year to 31 July 2011 Biscathorpe Biscathorpe Prospect: PEDL253 – Egdon 60% operated • Large 3D defined prospect to the west of Keddington • Oil discovered but not tested in 1 m sand in well drilled by BP in 1987 • Sands expected to thicken down-dip on structure • Net Egdon Best Estimate Prospective Resources of 8.47 mmbo • High Estimate Prospective Resources of 25 mmbo due to stratigraphic trapping potential Slide 12 Preliminary Results for the year to 31 July 2011 Exploiting Gas in Northern England & Offshore – Kirkleatham Gas Field PEDL068: Egdon 40% and operator • Discovered by Egdon in 2006: gas in Permian limestone (Cadeby Formation) at depth of 800 m • Gas sold to Sembcorp at Wilton for use in Gas Turbine • Maximum Gross design production of 5-6 mmcfg/d • Net Egdon Best Estimate Resources of 2.03 bcf with Proven of 0.8 bcf • Operational delays (weather and equipment) = first gas in April 2011 • Reservoir behaviour indicates small highly permeable volume fed by larger volume of lower permeability rock • Production reduced to manage reservoir – planned production of 1.5 to 2.0 mmcfg/d (Net Egdon 0.6 to 0.8 mmcfg/d or 100-133 boepd) • Increasing water production observed – well currently shut-in awaiting intervention to remove accumulated water from tubing Kirkleatham process site, Redcar Slide 13 Preliminary Results for the year to 31 July 2011 Ceres Gas Field P.1241 (47/9): Egdon 10% - non-operated • Sub-sea tieback to Mercury and then via Neptune and Cleeton to Dimlington onshore terminal • Significant maintenance shutdown in 2010-11 (7 days production) and again from July 2011 • Re-commencement of production on 17 September 2011 – continuing issues since restart have impacted production – now resolved • Net Egdon Proven & Probable Reserves of 3.7 bcf • Upside in 47/9-3 fault block • Expected gross production of c.

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