Europa Oil & Gas Announces Interim Results

Source: 4/14/2021, Location: Africa

Europa Oil & Gas (Holdings) plc, the AIM traded Ireland, Morocco and UK focused oil and gas exploration, development and production company, announces its interim results for the six month period ended 31 January 2021.

Operational highlights

Building a balanced portfolio of exploration and production assets

Onshore UK - commencement of oil flow at Wressle set to transform Europa's financial profile

- Successful and safe completion of operations to recomplete the Wressle-1 well and reperforate the Ashover Grit reservoir interval

- Well currently on continuous 24-hour test production
- Wressle projected to more than double Europa's net production to over 200boepd
- Production at Wressle expected to be highly profitable at today's US$60 plus per barrel oil prices - compares favourably to estimated break-even oil price of US$17.6 per barrel

- 86boepd was produced from Europa's three existing UK onshore fields during the period - compared to 90boepd for H1 2020

Offshore Ireland - lower risk / very high reward infrastructure-led exploration in proven gas play

- Awaiting regulatory approval of acquisition of 100% interest in Frontier Exploration Licence ('FEL') 3/19, which includes the 1.2 tcf Edge prospect and lies close to the ~1tcf producing Corrib gas field
- FEL 3/19 complements Europa's nearby FEL 4/19 which holds the 1.5 tcf Inishkea prospect
- Preparing to launch farmout of FELs 3/19 and 4/19, Europa's strategic position in the Slyne Basin

Offshore Morocco - large Inezgane licence in the Agadir Basin equivalent to c. 50 UKCS North Sea blocks
- Mapped over 20 prospects and leads which combined have the potential to hold over one billion barrels of unrisked oil resources - follows reprocessing and interpreting of historic 3D seismic data
- Prospects mapped in the Lower Cretaceous fan sand play, a prolific producer in West Africa
- Work ongoing to de-risk prospects ahead of farm-out launch to secure partner(s) to drill wells
- One year extension to initial phase of the licence to November 2022 granted to allow for time lost as a result of COVID-19 and to enable technical work programme to be completed

Financial performance

- Revenue 0.5 million (H1 2020: 0.8 million)

- Pre-tax loss of 0.6 million (H1 2020: pre-tax loss 3.5 million including write-offs taken following relinquishment of Irish licences)

- Net cash used in operating activities 0.2 million (H1 2020: 0.5 million)

- Cash balance at 31 January 2021: 0.3 million (31 July 2020: 0.8million)

- Appointment of Simon Oddie as CEO on a permanent basis

- Senior Independent non-executive Director Mr Brian O'Cathain appointed non-executive Chairman

- Board salaries and fees reduced by 50% in response to COVID-19 pandemic

- Director's Loan of 225,000 drawn down in January

Post reporting period events

- 1.44 million was raised (net of fees) via Placing and Broker Option to fund work programmes:

- evaluating late-stage appraisal/development projects to rebalance existing portfolio of production and exploration assets

- maximising recovery from existing onshore UK fields including potential workovers on WF2 and WF9 wells at the West Firsby field

- continuing technical analysis / seismic reprocessing on Inezgane Licence ahead of securing a farm-out partner

- The Director's loan taken out in January 2021 from CW Ahlefeldt-Laurvig and accrued interest was fully repaid in March 2021

- All salaries and fees re-instated to levels prior to cuts

Simon Oddie, CEO of Europa, said : "The first half saw activity across all three jurisdictions in which Europa operates in and shareholders can expect more of the same in the second half of the year: onshore UK, test production on the Wressle field commenced at the end of January; offshore Ireland, further preparations for the relaunch of the farm-out of the Company's Slyne Basin licence position, although receipt of regulatory approval for the acquisition of FEL 3/19 is still awaited; offshore Morocco, continuation of the technical work programme that is underway to de-risk the new prospect inventory.

"As a result of the post period end fundraise and in addition to the activity above, the second half will also see new work streams advanced. These include the evaluation of cost-effective low risk opportunities to increase UK onshore production at Europa's existing fields as well as the identification and pursuit of new ventures, specifically in the late stage, appraisal/development category. With oil prices trading above US$60 per barrel and Wressle projected to scale up net production to over 200boepd, management is focused on maintaining the momentum behind the Company in the months ahead, as we look to build a cash generative oil and gas company, one that offers shareholders exposure to multiple value creating opportunities, while minimising capital risk."

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