REG - Europa Oil & Gas - Operations Update

Europa Oil & Gas (Holdings)Announcement

31/01/2025 07:00

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RNS Number : 3575V  Europa Oil & Gas (Holdings) PLC  31 January 2025

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

 

31 January 2025

 

Europa Oil & Gas (Holdings) plc

("Europa" or the "Company")

 

Operations Update

 

Europa Oil & Gas (Holdings) plc, the AIM quoted UK, West Africa and
Ireland focused oil and gas exploration, development and production company,
provides an operational update on its current activities and outlook for 2025.

 

Equatorial Guinea

 

In Q4 2024, the Company, through its 42.9% shareholding in Antler Global
("Antler"), initiated a farmout process for its EG-08 asset which has an
internally estimated 2.2 TCF Pmean of gross prospective resources 1 . Since
beginning the farmout process, there has been significant interest in the
asset and discussions continue with a number of potential farminees.  Europa
is aiming to receive offers to provide Antler with a full carry on an
exploration well targeting the c.900BCF Barracuda prospect in H1 2025.

 

Ireland

 

Europa has a 100% interest in licence FEL 4-19, which contains the 1.5 TCF
Pmean 2  Inishkea West gas prospect. The Company continues to look for a
partner to drill an exploration well on the prospect, where Europa believes
that a successful discovery has the potential to supply at least two thirds of
Ireland's gas demand in 2030. The asset is adjacent to the producing Corrib
gas field, which is one of the lowest carbon-intensity gases in Europe, much
lower than UK imported gas. With compelling economics, which Europa believes
will result in a post-tax NPV10 of US$2.0 billion 3 , and a carbon emission
intensity of 2.8 kilograms per boe, compared to 36 kilograms per boe for UK
imported gas during 2022 4 , the prospect provides a farminee with a very
attractive risk reward proposition. The newly elected Irish government appears
to be concerned about security of energy supply and as such it is hoped that
they will be supportive of the domestic upstream sector.

 

UK

 

Cloughton Appraisal

 

Progress on Cloughton (Europa interest 40%) has been steady during the year
and the Company intends to submit a planning application for the Cloughton
appraisal well during Q1 2025. The multitude of independent reports that have
been commissioned to support the planning application highlight that the
chosen pad location is ideal for this well and for a potential development of
the 192 BCF GIIP, should the appraisal well prove that commercial rates are
achievable. Europa expects to shoot a seismic programme towards the end of
2025 with appraisal drilling forecast to commence early 2026.

 

A dedicated website is currently under construction that will provide all
stakeholders with information about the well, including planning reports, well
data, G&G information, impact on traffic, emissions, and much more. A
further announcement will be made when this site is launched.

 

Onshore Production

 

Europa continues to benefit from the strong performance of the Company's
onshore UK producing assets, particularly the Wressle oilfield in the East
Midlands (Europa working interest: 30%) which continues to produce at the top
end of the CPR production forecast. The Company's total UK net production in
December 2024 averaged over 124bopd and Europa anticipates an active year for
Wressle, with a development well planned to be drilled for the Penistone
horizon in H2 2025 (subject to necessary permits and consents) and preparation
for a second Penistone well and Broughton North exploration well to be drilled
in 2026.

 

The Wressle production is complemented by a gas monetisation solution that
will be developed in parallel with the Penistone well. The gas monetisation
solution is expected to enhance production from the field and substantially
increase revenues, as well as eliminate routine flaring from the Wressle
field.

 

The Company is also looking at optimising production operations at its Crosby
Warren site (Europa working interest: 100%), where the existing production
could be significantly increased through a simple workover programme that is
currently being considered. The workover will likely be conducted during 2025.

 

New Business

 

The Company continues to assess new opportunities, particularly in West Africa
where projects provide significant value-accretion that are within the
Company's financial capability.

 

2025 Budget

 

The Europa 2025 calendar year budget shows an unrestricted 5  cash position of
£0.96m as of 31 December 2024 and forecast G&A of £1.68m (reduced from
£2.23m budgeted for 2024).  The majority of capex for the year is forecast
to be spent on Wressle with the balance being spent on Cloughton, Crosby
Warren and FEL 4/19.

 

Project finance discussions to fund the Wressle capex are underway, although
there is no guarantee that this will be secured. Should Wressle project
financing be secured, or if Wressle operations are delayed beyond 2025, then
the Company forecasts that it has sufficient funds, from existing cash and
forecast profits from existing operations, to cover all costs and other capex.
Operations for Equatorial Guinea are fully funded for 2025 with the funds
already held in the Antler subsidiary.

 

Will Holland, Chief Executive Officer of Europa, said:

 

"2025 will undoubtedly be an active year for Europa as we progress with
multiple projects that have the potential to deliver significant value to
shareholders.

 

I am encouraged by the response that we have had to our EG-08 farm out
process. The compelling technical merits of a material gas resource with a
70-80% chance of success located 9km from existing infrastructure in a stable
region with a favourable fiscal and operating environment is understandably
attracting significant interest from multiple parties. I look forward to
updating the market on this exciting asset as we progress associated
workstreams.

 

In Ireland, I hope that the new administration continues to build on its
support for improving Ireland's security of supply and that this will manifest
itself as support for our Inishkea West prospect, which is ideally placed to
be quickly brought online via the existing infrastructure.

 

Progress on Cloughton has been steady during 2024 and we expect to continue
with this momentum during 2025 as we secure the necessary approval to drill
the appraisal well in 2026. With 192 BCF GIIP located onshore close to
existing infrastructure it can be brought online quickly, with minimal
disruption to the local community, and could be a vital source of domestic low
emission gas displacing high emission LNG imports.

 

We are optimistic that all necessary approvals and permits will be obtained
for the Wressle development programme to start around mid-2025. The programme
will not only develop the Penistone horizon of the field but also monetise the
gas by connecting to the local gas network which we believe will result in a
material increase in production and cashflows.

 

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. Our 2025 budget reflects this risk
assessed value-driven approach and I look forward to updating the market on
our progress throughout the year."

 

Qualified Person Review

 

This release has been reviewed by Alastair Stuart, Europa's Chief Operating
Officer, who is a petroleum engineer with over 35 years' experience and a
member of the Society of Petroleum Engineers and has consented to the
inclusion of the technical information in this release in the form and context
in which it appears.

 

* * 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

 Samantha Harrison / Ciara Donnelly / Elliot Peters              Grant Thornton UK LLP - Nominated Adviser  +44 (0) 20 7383 5100

 Peter Krens                                                     Tennyson Securities                        +44 (0) 20 7186 9033

 Patrick d'Ancona / Finlay Thomson / Kendall Hill / Anna Stacey  Vigo Consulting                            +44 (0) 20 7390 0230

 

 1  EOG updated internal figures following reprocessed data, revised
geological and engineering analysis and updated commercial assumptions

 2  estimates based on internal technical assessments

 3  assumes first gas in 2029 and gas price 75p/therm flat

 4  Independent report as per RNS of 22 April 22

 5  Excludes funds held in Antler Global

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