REG - Europa Oil & Gas - Acquisition of Interest in EG-08 Licence

Europa Oil & Gas (Holdings)Announcement

21/12/2023 07:15

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RNS Number : 5381X  Europa Oil & Gas (Holdings) PLC  21 December 2023

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil
& Gas

 

21 December 2023

 

Europa Oil & Gas (Holdings) plc

("Europa" or the "Company")

 

Acquisition of Interest in EG-08 Licence - Equatorial Guinea

 

Europa Oil & Gas (Holdings) plc, the AIM quoted UK, Ireland and West
Africa focused oil and gas exploration, development and production company, is
pleased to announce that it has acquired a 42.9% equity interest in Antler
Global Limited ("Antler") via a US$3 million cash subscription for new
ordinary shares in Antler (the "Subscription"). Antler holds an 80% working
interest in the recently acquired and highly prospective EG-08 production
sharing contract ("PSC"), offshore Equatorial Guinea, with Guinea Ecuatorialde
Petroleos ("GEPetrol"), the National oil company, holding the remaining 20%.

 

This Subscription adds an additional geographical location to the Company's
existing portfolio of assets, and one which the Board believes has enormous
near-term, infrastructure-led, near-field exploration potential. The
Subscription monies received by Antler will fund the first-year work programme
costs, including the acquisition of existing 3D seismic data, which will be
reprocessed alongside preparations to drill, whilst ensuring all financial
obligations under the EG-08 PSC with the Republic of Equatorial Guinea (the
"State") and GEPetrol, are met.

 

Whilst the initial two-year term of the licence does not require the drilling
of a well, the Company believes it already has drill-ready prospects, which
consist of three independent targets, with estimated total prospective
resources of 1.4 trillion cubic feet of gas equivalent (TCFE), based on
Company estimates. Antler will commence a farm-down process with a view to
bringing in a partner for drilling. The resource prospectivity of EG-08 has
only been examined at one stratigraphic horizon, which is analogous to
discoveries made in the adjoining block operated by Chevron. However, further
prospectivity exists in multiple horizons and these are yet to be evaluated.

 

Equatorial Guinea ("EG") has an established oil and gas industry with
associated infrastructure and is one of the biggest hydrocarbons producers in
sub-Saharan Africa. There have been multiple sizable oil and gas discoveries
made offshore Equatorial Guinea over the years, although there has been
limited exploration drilling in the past decade. However, there has been a
significant uptick in upstream exploration and development activity throughout
2023 with further planned for 2024-25.

 

A presentation with further details can be found on the Company's website. In
addition, the Company is holding a webcast for retail investors on Wednesday,
3 January 2024 at 2.30 p.m. (GMT). The presentation will be hosted on the
Investor Meet Company ("IMC") platform and is open to all existing and
potential shareholders. Questions can be submitted pre-event via your IMC
dashboard up until 9.00 a.m. the day before the meeting or at any time during
the live presentation. Investors can sign-up for free and add to meet Europa
via:
https://www.investormeetcompany.com/europa-oil-gas-holdings-plc/register-investor
(https://d31v2n04.eu1.hs-sales-engage.com/Ctc/I8+23284/d31V2n04/JlF2-6qcW8wLKSR6lZ3nPW6SD5YJ31838lW59xvPx5cnHMTW5RvlFR5Yx8X0W82xfxz83_t1FW5fVRql5BxPj0W6gbFxv8PzSFGW5FYfLr3hQn-GW5sywDY2WVGJsW2tZyBQ17jKCSW27B1vj3x_RwMN7lpdtLLq55GW4nzV_P49J1htW4mqbVV5xMdGgW8Dzwrm4fb-tlW66gXyM4R9h5TVC8pwX3bDxGmN12v_s82CTHCW60z0JD84_L1BW3vgQf-61ttGFW7Y_XYn8gvBh-W7CXKd02jXpzkW5clmTw8t15q7N8_BF2jHzcyKW9lnLSk557xwDW7bYVX77gtBcGW4sQ5pR2LBsjdW2RGWBK8Pd83VW15YBBW4J583Zf8B_kp604)

 

Will Holland, Chief Executive Officer of Europa, said:

 

"We are very excited about this potentially transformational deal for Europa,
which adds another high-impact exploration prospect to our portfolio and ties
with our strategic approach to replenishing the portfolio with potentially
high impact but relatively low risk prospects. Equatorial Guinea is an
enormous opportunity for us and provides us with near-term drilling activity
targeting over 1 TCFE of recoverable resource in an area with a well-developed
upstream industry and a highly supportive government. I am also pleased to
report that we have solid support from many of our institutional investors for
this acquisition."

 

Further Information on the Subscription, EG-08 and Antler

 

Under the terms of the Subscription, Europa shall pay to Antler aggregate
consideration of US$3 million, payable in four instalments, with the first
being shortly following entering into the Subscription agreement and the final
in October 2024. In addition, Europa, Antler and its founding shareholders
(Paul Haywood and Christopher Irons) have entered into a shareholder agreement
with customary protections and restrictions, including that each of Europa and
Antler's founding shareholders shall have the right to appoint one director to
the board of Antler; all decisions made by the board of Antler must be
unanimous; and an agreement that all oil and gas assets in Equatorial Guinea
are covered by area of mutual interest (AMI) provisions. William Holland shall
be Europa's appointee to the board of Antler.

 

Antler holds an 80% operated interest in the EG-08 PSC with GEPetrol holding
the remaining 20%. The PSC utilises a typical cost and profit oil structure
and includes a state royalty when certain production targets are met. The PSC
was ratified by the State on 4 October 2023. The EG-08 licence has a first
exploration period of four years with a drill or drop deadline after two
years. The costs relating to the first year of the EG-08 PSC are expected to
be satisfied through cash received by Antler under the Subscription and
include all financial, operational and other work programme related
workstreams.

 

For the year ended 30 September 2022, Antler reported a net profit of nil and
as at 30 September 2022, had net liabilities of £1,014. Antler was
established to acquire assets in EG; it acquired the PSC in May 2023 and as at
30 September 2022, was a shell company.

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014, as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018, as amended.

 

 

* * ENDS * *

 

For further information, please visit www.europaoil.com
(http://www.europaoil.com/)  or contact:

 William Holland                                   Europa Oil & Gas (Holdings) plc                            mail@europaoil.com
 James Dance / James Spinney / Rob Patrick         Strand Hanson Limited - Nominated & Financial Adviser      +44 (0) 20 7409 3494
 Peter Krens                                       Tennyson Securities                                        +44 (0) 20 7186 9033
 Patrick d'Ancona / Finlay Thomson / Kendall Hill  Vigo Consulting                                            + 44 (0) 20 7390 0230

 

 

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