EGDON Resources, the onshore specialist which plans to explore for shale gas in England with Ineos, has acquired a licence in the North Sea in a deal that reflects confidence in the exploration potential of the area.

Hampshire-based Egdon said it has acquired a 100 per cent interest in a licence off Yorkshire which contains undeveloped finds made decades ago, from Arenite Petroleum and Europa Oil & Gas.

“We are pleased to have acquired this highly prospective acreage at a nominal up-front consideration,” said chief executive Mark Abbott.

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Egdon will reimburse £15,000 costs incurred to date by the vendors. Further payments will be contingent on the results of work on the licence, P2304.

This sits to the south of a black operated by Egdon that contains the Resolution discovery made in 1966.

Egdon thinks the discovery extends into P2304, which also contains a find made by Total in 1981.

In its annual report for the year to 31 July, Egdon noted it had built a significant unconventional resources acreage position in Northern England, covering around 830 square kilometres, through a series of targeted acquisitions, farm-ins and licensing round success.

The company has interests in licences that chemicals giant Ineos bought into in November.

In the report Egdon noted the appeal of onshore operation. It said the lower capital and operating costs associated with onshore UK developments mean that new projects remain commercially attractive even with lower commodity prices.

However the firm said it had made progress during the period with the

Resolution prospect. The company said it planned to acquire 3D seismic survey data to optimise the planning for an appraisal well.

Oil and gas entrepreneur Tom Cross noted recently the costs of exploration support services have fallen markedly amid the downturn in the industry triggered by the sharp fall in the crude price from2014.