Europa Oil & Gas releases annual results

Operational highlights

Offshore Ireland

• LO 16/20, which holds Inishkea, Europa’s flagship gas prospect, converted to 15 year exploration licence FEL 4/19.
• 1.5 trillion ft³ gross mean un-risked prospective gas resources and 1 in 3 chance of success assigned to Inishkea.
• Progressing regulatory consent for site surveys over Inishkea, Kiely East and Edgeworth as part of drill site preparations.
• Continuing farm-out discussions with respect to Frontier Exploration Licence (FEL) 4/19, FEL 1/17 and FEL 3/13. FEL 4/19 now expected to be prioritised
• Secured a 12 month extension to the first phase of FEL 2/13 to 4 July 2020.

UK

• Average of 91 boe/d) (2018: 94 boe/d recovered from three UK onshore fields.
• Workover of the West Firsby 6 well utilising a drain hole jetting technique – the well is currently producing 7 boe/d net to Europa having previously produced nothing.
• Wressle planning appeal scheduled for 5 November 2019 – subject to a positive outcome, development would more than double Europa’s net production to around 240 bpd.
• Sold interest in PEDL143 to UK Oil & Gas PLC.

Financial

• 6% increase in Group revenue to £1.7 million (2018: £1.6 million).
• Zero exploration write-off (2018: £1.3 million).
• Narrowing of pre-tax loss to £0.7m (2018: loss £2.3 million).
• Post-tax loss of £0.7m (2018: loss £2.6 million).
• 16% reduction in administrative expenses to £811 000 (2018: £967 000).
• Cash used in operating activities £0.66 million (2018: cash used £0.48 million).
• Net cash balance as at 31 July 2019 £2.9 million (31 July 2018: £1.8 million).

Post reporting date events

• Award of Inezgane Offshore licence on Atlantic coast of Morocco.
• Irish Government announced intent to phase out future licensing for oil exploration, but not gas exploration; later confirmed that all existing exploration licences for both oil and gas remain valid.

Europa’s CEO, Hugh Mackay, said “Having de-risked multiple hundred million barrel plus prospects offshore Ireland and embarked on farm-out discussions with suitable partners, we have been keen to add a third territory to Europa’s portfolio, specifically one that complements the team’s technical capabilities. The post period end award of the Inzeghane Permit offshore Morocco represents the culmination of an extensive process and considerable work over the course of the year. Similar to Atlantic Ireland, Europa’s entry into Morocco is low cost and early stage. Like Ireland, with 250 million plus barrel prospects already identified, Inzeghane has the potential to move the needle in the event of drilling success.

“Inzeghane does not represent the sum of our new venture activity. Our aim is to build a full cycle oil and gas company and our priority is to add a late stage appraisal/development project to our licence base. At the same time, we are working hard to advance our existing assets, specifically securing funding to drill wells offshore Ireland and supporting the operator’s efforts to obtain planning consent for the development of the Wressle oil field, which promises to more than double our UK onshore production to around 240 bpd. At this rate and based on current oil prices, Europa’s revenue profile would leap to £3-4million a year, a figure that represents almost half our current market capitalisation. Together with a low cost base, Europa would be transformed into a profitable oil and gas company, at least at the underlying level, with a prospect inventory that has significant company-making potential.”

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/11102019/europa-oil-gas-releases-annual-results-to/