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Award of New Offshore Ireland Licensing Option
Europa Oil & Gas, the AIM listed oil and gas exploration, development and production company focused on Europe, has been awarded a new Licensing Option in the southern Porcupine Basin, offshore Ireland, as part of phase 1 of the 2015 Atlantic Ireland round.
This follows the announcement on 11 February 2015 by the Minister of State at the Department of Communications, Energy and Natural Resources, Mr. Joe McHugh.
The Company understands it will shortly be issued with a formal letter of award from DECNR, at which point Europa will confirm its acceptance of the LO. Once all the awards have been accepted Europa’s LO will be allocated a number and DECNR will publish a map showing the awarded LOs and the relevant companies. Europa will have a 100% interest in the two year LO. Following the completion of a work programme, Europa has the option to apply to the Irish authorities for their consent to convert the licence into a FEL.
Licence awards in the 2015 Atlantic Ireland round are being made in two phases. The Company understands that phase 1 announced on 11 February 2016 was designed to accommodate applications in areas where firm seismic acquisition programmes formed part of Licensing Option work programmes with some surveys planned to be acquired in summer 2016. The offer of awards for 14 licensing options involves eight companies, Eni, Europa, ExxonMobil, Nexen, Scotia, Statoil and Woodside as operators, along with BP who will partner with Eni. Europa has made additional licence applications and awaits the outcome of the second and final phase of awards scheduled for mid-May with great interest.
Europa CEO Hugh Mackay said, “We are delighted with the award of this Licensing Option, particularly given the strength of the competing companies. This is an endorsement of the strong technical work that supported our bids. We are pleased that major and mid-cap oil companies are now taking acreage positions around our licences and we feel this is providing validation of our long held belief that the South Porcupine Basin is underexplored and has the potential to hold substantial hydrocarbon reserves. The success of this licensing round indicates that the Porcupine is no longer under appreciated. We have made other applications that remain live and look forward to the announcement of the second phase of awards during May.”
Europa understands that formal documentation from the Irish Authorities authorising the transfer of Kosmos Energy Ireland’s interest and operatorship for FEL 2/13 and 3/13 to Europa is in preparation. Once this has been formally approved, Europa’s interest in both these licences will revert to 100%. As announced on 12 May 2015, a Competent Persons Report prepared by ERC Equipoise detailed total Gross mean Un-risked Prospective Resources of 1.5 billion barrels of oil equivalent across three prospects in FEL 3/13. ERCE estimates a mean Un-risked Net Present Value of approximately US$7 billion to a 100% working interest in these three prospects and a US$1.1 billion NPV on a risked basis.
Activity on these licences is focused on finding a farm-in partner with whom to take the licences into the next exploration phase and drill an exploration well. The target market is major and mid-cap oil companies and the farm-out data room opened on 11 January 2016. Europa is pleased with the response from target companies and considers the Phase 1 awards to be a positive development for the farm-out.
