Europa Oil & Gas Announces Final Results for the Year to 31 July 2021

Source: www.gulfoilandgas.com 10/21/2021, 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 final results for the 12 month period ended 31 July 2021.

The full Annual Report and Accounts will be available shortly on the Company’s website at www.europaoil.com and will be mailed in November 2021 to those shareholders who have requested a paper copy.

Operational highlights - Building a balanced portfolio of exploration and production assets.

Onshore UK – Wressle more than doubles net production to over 200bopd • First oil at Wressle achieved
- Production established in excess of target gross rate of 500bopd post period end
- Europa’s net share of Wressle production equates to over 150bopd
- With an estimated break-even oil price (excluding Europa’s corporate overheads) of US$17.6 per barrel, Wressle production is highly profitable at current oil prices
- Well flow is continuing to clean-up and has not yet reached its full potential

- 93boepd was produced from Europa’s UK onshore fields during the year with early Wressle test production covering the decline of three older fields and comparing favourably to 92boepd FY20

• Geothermal energy
- MOU signed with Causeway Geothermal (NI) Ltd to carry out studies to assess the potential of Europa’s West Firsby field as a test site for sustainable, clean geothermal energy systems
- West Firsby regarded as an ideal geothermal energy test site due to comprehensive dataset, existing well bores and geothermal gradient
- Potential to convert onshore legacy oilfields into sources of clean and reliable energy forms part of Europa's ESG strategy

Offshore Morocco - Farmout Launch of Inezgane Licence in the Agadir Basin, Morocco
- Follows completion of technical work which identified a significant volume of unrisked resource - in excess of 2 billion barrels (oil equivalent) in the top five ranked prospects alone
- Inezgane lies on the same geological trend which has led to major oil and gas discoveries along the west coast of Africa with reservoirs and source rocks in common with the prolific West African play
- Ongoing discussions with a number of potential co-venturers looking to farm-in
- One year extension to initial phase of the licence to November 2022 granted to allow for time lost as a result of COVID-19

Offshore Ireland - Lower risk / very high reward infrastructure-led exploration in proven gas play in the Slyne Basin

- 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 lies close to Europa's FEL 4/19 which holds the 1.5 tcf Inishkea prospect
- Farmout of FELs 3/19 and 4/19 commenced conditional on regulatory approval of the acquisition of FEL 3/19

COVID-19
- Operational activity has continued at the four production sites
- London office has been exited generating cost saving
- All salaries and fees have been re-instated to levels pre Covid-19
- The Group has not taken any further Covid-19 government assistance since the £50k Bounce back loan in the prior year.

Financial performance
- Revenue £1.4 million (2020: £1.2 million)
- Pre-tax loss of £0.85 million (2020: pre-tax loss £5.4 million including write-offs taken following relinquishment of Irish licences)
- Net cash used in operating activities £0.5 million (2020: £0.8 million)
- Cash balance: at year end £0.6 million (31 July 2020: £0.8 million)

Board
- Appointment of Simon Oddie as CEO on a permanent basis in August 2020
- Appointment of Senior Independent non-executive Director Mr Brian O’Cathain as non-executive Chairman

Post reporting period events
- Inezgane licence farmout officially announced on 3rd August 2021
- Wressle achieved over 500 bopd after successful proppant squeeze operations in late August 2021 and this increased to 950 boepd in September which was over previous expectations
- Following the achievement of 500bopd oil flow rate as announced in August 2021, the Directors consider that Wressle has met the requirements under IFRS6 for transfer to producing assets as of that date

Simon Oddie, CEO of Europa, said:
“The milestones we achieved across our multistage portfolio of licences during the year under review have laid the foundations for an exciting new phase in our growth trajectory. Notably, with the Wressle Oil Field in North Lincolnshire delivering first oil and achieving its target of 500 barrels per day, Europa’s UK onshore net production has doubled to over 200 bopd post period end. Wressle is showing capacity to produce at significantly higher rates than the previous target and further major development potential exists in other reservoirs. With oil prices above US$80/barrel, this achievement provides a massive boost to the Company’s financial profile and in turn will give us a platform with which to pursue our strategy of developing significant value accretive opportunities while minimizing risk.

“Elsewhere, we are also pleased with the response to the farmout launch for our highly prospective Inezgane Licence in Agadir Basin, Morocco and the strong interest, to date, from potential operators. I am excited about the future possibilities at Inezgane, which has the potential to hold over two billion barrels of unrisked prospective resources and complements the Company’s goal to have a balanced portfolio of energy assets. The technical work completed in the last 12 months has focused on the top five ranked prospects - each of which have mean resources in excess of 200 mmboe at the Albian level.

“In Ireland, we are still awaiting regulatory approval for our acquisition of a 100% interest in Frontier Exploration Licence (‘FEL’) 3/19 located close to Corrib - Ireland’s biggest producing gas field. Subject to approvals, we will be progressing the farmout of both the newly acquired FEL 3/9 and our existing 100%-owned FEL 4/19 – our two strategic offshore gas assets in the Slyne Basin.

“Europa is also advancing its ESG ambitions during the past year signing a MOU with Causeway Geothermal (NI) Ltd.in late June to investigate the potential of our mature oilfield at West Firsby in the East Midlands, as a test site for the production of geothermal energy. This firmly aligns with our stated objective of playing a key role in the UK’s transition to green energy. With much activity expected across our existing portfolio as well as our continued evaluation of a number of potential late-stage appraisal/development ventures, I look forward to updating the market on developments in the months ahead.”


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