REG - Europa Oil & Gas - Operational Update

Europa Oil & Gas (Holdings)Announcement

11/01/2023 07:00

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RNS Number : 3133M  Europa Oil & Gas (Holdings) PLC  11 January 2023

 

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

 

11 January 2023

 

Europa Oil & Gas (Holdings) plc

("Europa" or the "Company")

 

Operational Update

 

 

Europa Oil & Gas (Holdings) plc, the AIM quoted UK and Ireland focused oil
and gas exploration, development and production company, provides an
operational update on its current activities and the outlook for 2023.

 

Onshore UK

 

Europa continues to benefit from the excellent performance of the Company's
onshore UK producing assets, particularly the Wressle oilfield in the East
Midlands (Europa working interest: 30%). The Company's total UK net production
in December 2022 averaged over 300 bopd, and Europa anticipates an active year
for Wressle, with a firm development well planned to be drilled for the
Penistone horizon in H2 2023 (subject to necessary permits and consents) and
preparation for a second Penistone well and Broughton North exploration well
to be drilled in 2024. When the Penistone horizon comes online, expected in Q4
2023, the Board forecasts group production net to Europa of over 500 boepd.
The production is complemented by the gas monetisation solutions planned for
Wressle via a "Gas to Wire" system, forecast to be completed in Q2 2023, and a
gas export pipeline, developed in parallel with the Penistone well, expected
to be operational by Q4 2023. Both gas monetisation solutions will not only
enhance production from the field and substantially increase revenues but will
also eliminate routine flaring from the Wressle field.

 

The Company is also looking at optimising production operations at its Crosby
Warren and West Firsby sites (Europa working interest: 100%), which continue
to provide stable production of over 40 bopd.

 

Offshore UK

 

In conjunction with the Company's partner i3 Energy, in 2023 Europa will
continue to explore options for the development of the Serenity oil field in
the Outer Moray Firth area of the North Sea (Europa working interest: 25%).
The discovered reserve would likely be developed as a subsea tie-back to
Repsol Sinopec's Tain Field. The field could be a unitised development which
would be highly material to Europa, with net production to Europa anticipated
to be circa 1,000 bopd. Further updates will be provided as development
discussions between the Serenity and Tain partners progress.

 

Ireland

 

Europa has a 100% interest in licence FEL 4-19, which contains the significant
Inishkea gas prospect. The Company has engaged Llamas and Bannister Energy
Advisors Ltd to assist with a farm out process which will commence shortly
(https://labenergyadvisors.com/ (https://labenergyadvisors.com/) ). In the
event of a successful discovery at Inishkea, Europa believes that the field
alone has the potential to supply at least two thirds of the gas required for
the 2 Gigawatts of new gas-fired power generation committed to in the Irish
Government's updated Climate Action Plan. The adjacent producing Corrib gas
field is one of the lowest carbon-intensity gases in Europe, much lower than
UK imported gas, with a carbon emission intensity of 4.5 kilograms per boe,
compared to 22 kilograms per boe for UK imported gas. The Board considers it
to be probable that gas from Inishkea would be of similarly low carbon
intensity.

 

New Business

 

The Company continues to assess new opportunities focussing on appraisal and
development projects which provide significant value-accretion whilst
minimising risk. This includes participating in the North Sea Transition
Authority's 33(rd) licensing round, where the application period closes this
week.

 

ESG

 

Europa is working to contribute to local energy security and the global
transition to a low carbon economy whilst delivering value to stakeholders.
The Company recognises that a wide range of Environmental, Social and
Governance ("ESG") topics form the basis of how it conducts its business and
operations. The Company will be building on the ESG foundations that have
already been laid and during 2023 will set meaningful goals to help contribute
towards the 2050 Net Zero target.

 

2023 Budget

 

The Europa Board has approved a 2023 budget which includes net committed capex
of £5.1 million across the asset base. The Company has a forecast net cash
position of £4.6 million at 31 January 2023. In addition, it forecasts that
it will generate £4.2 million in free cash flow during 2023 (pre-capex).

 

Simon Oddie, CEO of Europa, commented:

 

"We are very excited about the outlook for Europa as we enter 2023. The
Wressle oilfield continues to outperform expectations and complements
production from our operated assets at Crosby Warren and West Firsby and our
interest in Whisby, to provide valuable cashflow to fund the ongoing
development of our asset base. In addition, our existing cash balance and
ongoing cashflow allows us to seek other opportunities, both onshore and
offshore.

 

The Europa Board adopts a prudent approach, balancing the inherent risks
associated with exploration, appraisal and development against the value
creation of these upstream activities. The 2023 budget reflects this risk
assessed value-driven approach and I look forward to updating the market on
our progress throughout the year."

 

 

* * ENDS * *

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

 Simon Oddie / William Holland / Murray Johnson  Europa Oil & Gas (Holdings) plc                            mail@europaoil.com
 James Dance / James Spinney                     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               Vigo Consulting                                            + 44 (0) 20 7390 0230

 

Notes to Editors

Europa Oil & Gas (Holdings) plc has a diversified portfolio of multi-stage
hydrocarbon assets which includes production, development and exploration
interests, in countries that are politically stable, have transparent
licensing processes, and offer attractive terms. Production for the year
ending 31 July 2022 was 245 bopd. In April 2022, Europa farmed into P.2358,
Block 13/23c ("Serenity") in the Outer Moray Firth area of the North Sea. The
licence contains the 2019 Serenity oil discovery, in which Europa now has a
25% interest. The Company holds one exploration licence offshore Ireland,
which has the potential to host gross mean un-risked prospective resources of
1.5 trillion cubic feet ("tcf") gas. Inishkea is a near field gas prospect in
the Slyne Basin which the Company classifies as lower risk due to its close
proximity to the producing Corrib gas field and associated gas processing
infrastructure.

 

 

 

 

 

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