Europa Oil & Gas (Holdings) plc /
Index: AIM / Epic: EOG / Sector: Oil & Gas
27 September 2016
Europa Oil &
Gas (Holdings) plc (‘Europa’ or ‘the Company’)
Sale of Interest
in Wressle Discovery
Europa Oil & Gas (Holdings) plc, the AIM traded oil and gas
exploration, development and production company focused on
Europe, is pleased to announce it
has signed a Sale and Purchase Agreement (`SPA') in relation to its
33.34% interest in PEDL180 and PEDL182 (‘the Licences’) in North
Lincolnshire with Union Jack Oil plc (‘UJO’). The Licences
cover the Wressle discovery (PEDL180) and the Broughton North
prospect (PEDL182).
- Under the terms of the SPA, UJO will acquire a 3.34% working
interest in the Licences from Europa for a cash consideration of
£600,000
- The transaction implies a £5.4 million mark to market for
Europa’s remaining 30% interest in the Licences
- Wressle is anticipated to commence production at a gross rate
of 500 bopd in early 2017
- Europa’s anticipated net share of 150 bopd from Wressle is
expected to more than double existing production from the West
Firsby and Crosby Warren fields and Whisby-4 well
- Summary details of a Competent Persons Report compiled by ERC
Equipoise Limited (‘ERCE’) were published by Europa and its
partners in respect of Wressle and the Broughton North Prospect on
26 September 2016
- Subject to approval of the assignment of interest from the Oil
& Gas Authority, Europa will retain a 30.00% interest in the
Licences alongside Egdon Resources UK Limited (25.00%), Celtique
Energie Petroleum Limited (33.33%) and Union Jack Oil plc
(11.67%)
Europa CEO Hugh Mackay said, “We
consider this transaction to represent a sensible monetisation of
part of the asset now it has been largely de-risked,
whilst still retaining sizeable exposure to production and
upside on the other reservoirs. Importantly, this transaction
provides investors with a point of reference for the value of our
remaining 30% interest in the Licences. At £5.4 million our
30% interest in these two licences accounts for almost half our
current market capitalisation.
“PEDL180 and 182 are just two of a portfolio of licences we
hold. These include three UK onshore fields which in H1
produced 124 boepd net to Europa; PEDL143 containing the Holmwood
prospect in the Weald Basin, which we rate as the best undrilled
conventional prospect onshore UK; and seven licences offshore
Ireland which we estimate to have
gross mean un-risked prospective and indicative resources of more
than 4 billion barrels of oil equivalent and 1.5 tcf of
gas. The funds released will be used to fund our share
of drilling the Holmwood exploration well in PEDL143, which we
anticipate drilling in 2017 subject to obtaining the relevant
permits and permissions. In the meantime, we continue with our
strategy to advance and monetise our multistage portfolio of
licences, and in the process generate value for our
shareholders.”
Europa’s net interests following this transaction are tabulated
below:
Table summarising gross volumes at
Wressle and Broughton North along with net volumes attributed to
Europa’s interests before and after transaction
|
|
Gross Volumes
|
|
|
Net
Volumes attributable to Europa before transaction |
|
|
Oil
MMstb |
Gas
Bscf |
Oil and
Gas* MMboe |
Oil
MMstb |
Gas
Bscf |
Oil and Gas* MMboe |
Wressle
2P Ashover Grit and Wingfield Flags |
0.62 |
0.20 |
0.65 |
0.21 |
0.07 |
0.22 |
2C
Penistone Flags |
1.53 |
2.00 |
1.86 |
0.51 |
0.67 |
0.62 |
Broughton North
Mean Unrisked Prospective Resources |
0.51 |
0.51 |
0.60 |
0.17 |
0.17 |
0.20 |
|
|
Gross Volumes
|
|
|
Net
Volumes attributable to Europa after transaction |
|
|
Oil
MMstb |
Gas
Bscf |
Oil and
Gas* MMboe |
Oil
MMstb |
Gas
Bscf |
Oil and Gas* MMboe |
Wressle
2P Ashover Grit and Wingfield Flags |
0.62 |
0.20 |
0.65 |
0.19 |
0.06 |
0.20 |
2C
Penistone Flags |
1.53 |
2.00 |
1.86 |
0.46 |
0.60 |
0.56 |
Broughton North
Mean Unrisked Prospective Resources |
0.51 |
0.51 |
0.60 |
0.15 |
0.15 |
0.18 |
*Gas converted to oil equivalent using 6 Bscf/MMboe conversion
and added to oil volume
Glossary:
Some of the terms used in this announcement are defined below. A
more exhaustive glossary is contained in ERCE’s letter to Europa’s
Board of Directors summarising the findings of their CPR has been
published on the Company’s website (www.europaoil.com).
Proved Reserves
Proved Reserves are those
quantities of petroleum, which by
analysis of geoscience and engineering
data, can be estimated with
reasonable certainty to be commercially
recoverable, from a given date
forward, from known reservoirs and
under defined economic conditions,
operating methods, and government regulations.
If deterministic methods are used, the term reasonable certainty
is intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods are
used, there should be at least a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
The area of the reservoir considered as Proved includes:
- the area delineated by drilling
and defined by fluid contacts,
if any, and
- adjacent undrilled portions of
the reservoir that can reasonably
be judged as continuous with it
and commercially productive on the
basis of available geoscience and
engineering data
In the absence of data on fluid contacts, Proved quantities in a
reservoir are limited by the lowest known hydrocarbon
(LKH) as seen in a well
penetration unless otherwise indicated
by definitive geoscience, engineering, or
performance data. Such definitive
information may include pressure
gradient analysis and seismic indicators.
Seismic data alone may not be
sufficient to define fluid contacts
for Proved Reserves (see “2001
Supplemental Guidelines,” Chapter 8).
Reserves in undeveloped locations may
be classified as Proved provided that the locations are in
undrilled areas of the reservoir that can be judged with reasonable
certainty to be commercially productive and interpretations of
available geoscience and engineering data
indicate with reasonable certainty
that the objective formation is
laterally continuous with drilled Proved locations. For
Proved Reserves, the recovery
efficiency applied to these
reservoirs should be defined based
on a range of possibilities supported
by analogues and sound engineering
judgment considering the characteristics of the Proved
area and the applied development programme.
2P
Proved + Probable, a best estimate category of Reserves.
Contingent Resources
Contingent Resources are those
quantities of petroleum estimated, as
of a given date, to be
potentially recoverable from known
accumulations by application of
development projects, but which are
not currently considered to be commercially recoverable due to one
or more contingencies.
Contingent Resources may include,
for example, projects for which there
are currently no viable markets, or
where commercial recovery is
dependent on technology under
development, or where evaluation of
the accumulation is insufficient to
clearly assess commerciality. Contingent
Resources are further categorized in
accordance with the level of
certainty associated with the
estimates and may be sub?classified based on
project maturity and/or characterized by their economic status.
2C
A best estimate category of Contingent Resources.
Prospective Resources
Prospective Resources are those
quantities of petroleum which
are estimated, as of a given
date, to be potentially recoverable from undiscovered
accumulations. Potential accumulations are evaluated according to
their chance of discovery and, assuming a discovery, the
estimated quantities that would be
recoverable under defined development
projects. It is recognized that the
development programs will be of
significantly less detail and depend
more heavily on analog developments in the earlier phases of
exploration.
* * ENDS * *
For further information please visit http://www.europaoil.com/
or contact:
Hugh Mackay |
Europa |
+ 44 (0) 20 7224 3770 |
Phil Greenhalgh |
Europa |
+ 44 (0) 20 7224 3770 |
Matt Goode |
finnCap Ltd |
+ 44 (0) 20 7220 0500 |
Simon Hicks |
finnCap Ltd |
+ 44 (0) 20 7220 0500 |
Frank Buhagiar |
St Brides Partners Ltd |
+ 44 (0) 20 7236 1177 |
Susie Geliher |
St Brides Partners Ltd |
+ 44 (0) 20 7236 1177 |
Notes
Europa Oil & Gas (Holdings) plc has a diversified portfolio
of multi-stage hydrocarbon assets that includes production,
exploration and development interests, in countries that are
politically stable, have transparent licensing processes, and offer
attractive terms. In H1 2016 Europa produced 124 boepd.
Its highly prospective exploration projects include the Wressle
development (targeting production start-up in early 2017 at up to
500 bopd gross) in the UK; 100% owned gas exploration prospect (107
bcf) and appraisal project (CPR 277 bcf) in onshore France, a joint venture with Vermilion Energy
also in onshore France; and seven
licences offshore Ireland with the
potential to host gross mean un-risked prospective and indicative
resources of more than 4 billion barrels oil equivalent and 1.5 tcf
gas across all seven licences.
Qualified Person Review
This release has been reviewed by Hugh
Mackay, Chief Executive of Europa, who is a petroleum
geologist with 30 years' experience in petroleum exploration and a
member of the Petroleum Exploration Society of Great Britain, American Association of
Petroleum Geologists and Fellow of the Geological Society. Mr
Mackay has consented to the inclusion of the technical information
in this release in the form and context in which it appears.