How serious is Wressle setback for Edgon Resources?
On 5 January it emerged that the Planning Inspectorate had unexpectedly upheld a decision to block the development of the Wressle oil discovery in North Lincolnshire.
The operator of the field, Egdon Resources (EDR:AIM) and its partners Union Jack Oil (UJO:AIM) and Europa Oil & Gas (EOG:AIM) all suffered big share price falls. In particular, Egdon fell 1.44p to 6.7p in the immediate aftermath of the news.
Stockbroker VSA Capital noted Wressle contributed just 1.2p to its target valuation of 48.8p for Egdon’s share price, yet the market may be more concerned about the loss of projected production of 120 barrels of oil equivalent (boepd) and the cash flow associated with this output.
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