Total Enters Shale Gas Licences In UK; Egdon Signs Farm-out Agreement

(RTTNews) - Total S.A. (TTA.L, TTFNF.PK, TOT) announced that it has acquired a 40% interest in two shale gas exploration licences in the United Kingdom. The interests are in Petroleum Exploration & Development Licences 139 and 140 in the Gainsborough Trough area of the East Midlands region which cover an area of 240 km.

In a separate announcement, Egdon Resources plc (EDR.L) and its partners GP Energy Limited, Island Gas Limited and eCORP Oil & Gas UK Limited announced the signing of a farm-out agreement with Total E&P UK Limited, a subsidiary of Total SA, in respect of the Onshore Petroleum exploration and development licences PEDL139 and PEDL140, whereby Egdon will hold a 14.5% interest in the licences.

On completion of the transaction, the interests in the licences will be: Total E&P UK Limited (40%), GP Energy Limited (17.5%), Island Gas Ltd (14.5%), Egdon Resources UK Ltd (14.5%), and eCorp Oil & Gas UK Ltd (13.5%).

Total will earn a 40% interest in the Licences through the payment of $1.6 million in back costs and the funding of a fully carried work programme of up to $46.5 million. Total has the option to exit after an initial period of the work programme corresponding to a minimum commitment of $19.5 million. Island Gas Limited, a subsidiary of IGas Energy plc (IGAS.L), will be appointed as the operator of the licences on completion and Total will become operator at the end of the carried work programme.

The licences are immediately adjacent to licences PEDL209 and PL161/162 where Egdon has further interests.