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EPIC: EOG
Market: AIM
52-week High/Low: 7.96p / 3.33p
Sector: Energy
Market Cap: 22.98M
Europa Oil & Gas (Holdings) Plc

Europa Oil & Gas (Holdings) Plc

Europa Oil & Gas (Holdings) plc is an AIM listed exploration and production company focused on Europe. It offers an attractive mix of very high impact exploration assets offshore Ireland and interests exploration, production and development onshore UK.

Europa Oil & Gas (Holdings) Plc

www.europaoil.com

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Big picture - Why invest in Europa Oil & Gas (Holdings) Plc


Europa Oil & Gas (Holdings) Plc Snapshot

Europa's objective is to generate substantial shareholder value by finding and producing oil and gas. To increase the probability of success whilst managing risk, a disciplined approach to the management of the Company's hydrocarbon assets is applied at all stages of the life of a licence. The Company is committed to taking commercial decisions on the entire asset base with management focused on exiting projects at the point of maximum value for investors through the rigid application of a drill, drop, dilute or divest policy. Europa's highly prospective exploration portfolio is actively managed with each project being subjected to first class technical as well as commercial analysis allowing management to make informed decisions on whether individual projects ought to be pushed down the exploration and production funnel or out of it.

Management recognises the need to continually repopulate and replenish the asset base with new licences as existing projects are progressed along the development curve. An acceptable risk/reward profile for an individual project depends on its impact on the overall portfolio, the balance of assets at the time and the objective of the Company. Industry leading portfolio management methodologies are deployed to ensure the risk/reward trade- off inherent in the portfolio is transparent to ensure shareholder value is maximised.

Europe is the current geographic focus. However management is prepared to evaluate and acquire quality assets wherever they become available preferably in countries that are politically stable, have transparent licensing processes, and offer acceptable commercial terms.

Production - UK

The Company produces from three oilfields in the East Midlands - a 100% working interest in both the West Firsby and Crosby Warren fields and a 65% non-operated interest in Whisby. Overall daily production is stable at approximately 110 barrels of oil, all of which is transported by tanker to the refinery at Immingham in NE Lincolnshire.

The Crosby Warren field started production in 1987 and is located in the grounds of the steelworks at Scunthorpe. Two production wells operate here on traditional beam pumps or 'nodding donkeys', producing ~30bopd.

Production from the Ashover/Wingfield reservoir units at the Wressle field is anticipated to commence in 2017. Forecast gross production at startup is 500bopd gross (100bopd net to Europa).

Monthly oil production for Crosby Warren, West Firsby and Whisby is provided to OGA (The Oil and Gas Authority) using the UK PPRS "Petroleum Production Reporting System". Data can be viewed on the OGA website.

Development

PEDL180 (Wressle)

PEDL180 is home to the Wressle oil discovery which lies 5km southeast of, and along the same structural trend as, the Europa-operated Crosby Warren field which has been producing oil for almost 30 years. The field was discovered by the Wressle-1 conventional exploration well which was drilled to a total depth of 2,240m (1,814m TVDSS) on 23 August 2014. Petro-physical evaluation of MWD (measurement whilst drilling) log data indicated over 30m measured thickness of potential hydrocarbon pay in three main intervals:

  • Ashover Grit - up to 6.1m measured thickness of potential hydrocarbon pay
  • Wingfield Flags - up to 5.64m
  • Penistone Flags - up to 19.8m

Four intervals were tested between February & March 2015 flowing an aggregate 710 boepd during testing operations:

  • Ashover Grit - 80 bopd and 47 thousand cubic feet of gas per day (mcfd), free flow;
  • Wingfield Flags - up to 182 bopd and 0.456 million cubic feet of gas per day (mmcfd), free flow;
  • Penistone Flags zone 3 - up to 1.7 mmcfd and up to 12 bopd, free flow;
  • Penistone Flags zone 3a - 77 bopd, swabbed

The results facilitated the design of an Extended Well Test (EWT) programme to quantify the production levels that could be attained from pumped production. Reservoir engineering analyses indicate an initial production flow rate of 500 bopd gross from the Ashover Grit interval. A CPR was issued on 26 September 2016 which identified gross 2P reserves on the Wressle structure of 0.65 mmboe in the Ashover and Wingfield Flags and gross 2C contingent resources of 1.86 million boe in the Penistone Flags. The EWT provided the basis for the Field Development Plan (FDP) which was submitted on 8 September 2016. An application for planning permission and applications for Environment Agency permits were submitted in June 2016. First oil at Wressle is targeted for 2017.

On 24th November 2016, Europa agreed the sale of a 10% interest in PEDL180 and 182 to Upland Resources (UK Onshore) Limited for up to GBP1.85 million. Completion of the sale is subject to planning, EA and FDP approvals.

Exploration - UK

Europa is involved in a number of exploration licences in the UK:

PEDL181 (Kiln Lane)

The Kiln Lane well spudded on 23 February 2015 and reached a total depth (TD) of 2,291 metres on 19 March.

Sandstones in the Westphalian and Namurian intervals were penetrated in line with the pre-drill geological model and significant oil and gas shows were observed during drilling operations.

However, wireline logging and subsequent petrophysical analysis indicates that the sandstones encountered are water wet.

The Well will therefore be plugged and abandoned and the site restored to agricultural use.

PEDL182 (Broughton)

The Broughton prospect is located in the East Midlands Petroleum Province and was previously drilled by BP who found oil. Broughton has estimated mean gross unrisked recoverable resources of 1.85mmbo. Working interest shares are as above. 49 sq km of 3D seismic acquisition has been processed.

PEDL143 (Holmwood)

The Holmwood prospect located in the Weald Basin, Surrey, has mean gross recoverable resources of 5.64mmbo. The licence covers an area of 5 sq km and is a Jurassic carbonate and sandstone project with a relatively low geological risk profile.

Europa has a 40% working interest in the licence, Egdon Resources 38.4%, Altwood Petroleum 1.6%, and Warwick Energy 20%.

The prospect lies south of Dorking within the Surrey Hills Area of Outstanding Natural Beauty and an application to construct a temporary exploration well on the site was originally made in 2008.

For more information please click here...

FRANCE

Europa holds one permit in the Aquitaine basin: Tarbes Val d'Adour.

Tarbes Val d'Adour (20%)

In February 2015, Europa announced the signing of a Farm-Out Agreement (FOA) in relation to the Tarbes permit with Vermilion REP SAS, a wholly owned subsidiary of Vermilion Energy Inc (Vermilion) a Calgary, Alberta based international oil and gas producer. Tarbes has previously produced oil from two fields and is located in the Aquitaine basin close to the giant Lacq - Meillon gas fields.

  • Under the terms of the FOA, Vermilion acquires an 80% interest in, and operatorship of, Tarbes with Europa holding the remaining 20% interest.
  • Should Vermilion decide to proceed with exploration activities, they will assume 100% of the cost of an optional work programme, which may include seismic acquisition/reprocessing and drilling operations up to a total of EUR4.65 million. Once costs above this level are incurred, Europa will be responsible for its 20% share of future work programme costs
  • Tarbes contains several oil accumulations that were previously licensed by Elf but were abandoned in 1985 due to a combination of technical issues and low oil prices. Two fields, Jacque and Osmets, were drilled using vertical wells and generated modest production.
  • The FOA is subject to the relevant approvals being granted by the French authorities - for the transfer of equity and operatorship to Vermilion and obtaining an extension for the permit. Both these approvals processes have started.

 

 

IRELAND

Europa operates seven licences in the Irish Atlantic Margin, covering an area of 5,818 km2. Four of these licences are in the South Porcupine basin, targeting prospectivity on multiple levels including the Cretaceous; the pre-rift; syn-rift; and post-rift plays.

The Cretaceous stratigraphic play comprises Early Cretaceous turbidite sandstone reservoirs; charged by mature Late Jurassic and Early Cretaceous source rocks; and contained in stratigraphic traps with elements of structural closure. The Cretaceous play in Ireland is essentially undrilled and is considered to be analogous to the same play in the equatorial Atlantic Margin province that has delivered the Jubilee and Mahogany oil fields.

Just as Jubilee and Mahogany inspired operators including Europa to target Early Cretaceous turbidite sandstone reservoirs in the Porcupine basin, recent discoveries in other Atlantic basins have opened up the potential for additional plays to be targeted in the Irish Atlantic Margin. In the Flemish Pass basin offshore Newfoundland, Statoil has pioneered the pre-rift play following the Bay du Nord discovery. Offshore Senegal, Cairn’s SNE discovery has opened up the potential for early post-rift sculptural events in the Porcupine. Having its own proprietary 3D seismic provides Europa with valuable technical insights and based on these the Company believes there are at least three essentially undrilled exploration plays in the South Porcupine Basin.

Map showing Irish concessions

Hugh Mackay, CEO
Hugh, a geologist who joined Europa in 2011, has a wealth of experience in the oil and gas sector, including eight years at BP in a variety of roles in the UK, Oman and Egypt, then at Enterprise Oil in leadership roles, culminating as head of the SE Asia division. Hugh sold the Peak Group to AGR ASA for $50 million and founded Avannaa Resources, a leading mineral exploration company in Greenland. Hugh has a BSc in Geology from the University of Edinburgh and a Sloan MSc in Management from London Business School.

Phil Greenhalgh, Finance Director
Phil graduated from Imperial College with a BEng in chemical engineering and subsequently became a member of the Chartered Institute of Management Accountants. He began his financial career as Financial Controller with Kelco International, a subsidiary of Merck & Co. He moved to Monsanto plc before becoming Finance Director with Pharmacia Ltd. He moved to Whatman plc, a FTSE 250 company, where he led the financing of a €50m company acquisition, oversaw a substantial share price recovery and was a key player in the Whatman turnaround.

William Ahlefeldt, Non-executive Director
William helped take Europa onto AIM and remains its largest shareholder. He started his career at Maersk as a petroleum engineer followed, in 1987, by IPEC, a London based consultancy, where he was responsible for field reserves estimations. In 1990, he became an independent consultant, undertaking field and portfolio evaluations for acquisitions and field development work on a range of projects in the North Sea, former Soviet Union and Middle East. He is also the founder of IFX Infoforex. William has continued to be active in petroleum engineering consulting, carrying out portfolio evaluations and project management.

Colin Bousfield, Non-executive Chairman
Colin is an Associate of the Chartered Institute of Banking having spent over 30 years in banking with Barclays, Bank of Scotland, RBS and Commonwealth Bank of Australia, primarily involved in providing finance and corporate advice to oil and gas companies. Colin was CFO for a private unconventional resources group active in Europe, Composite Energy, prior to its sale to Dart Energy Ltd of Australia. He was then CFO for a European onshore drilling services company, Geometric Drilling Ltd, prior to its sale to the Entrepose Contracting group.

Roderick Corrie, Non-executive Director
Roderick is a graduate of Cambridge University and an Associate of the Chartered Institute of Banking. He is a strategic adviser and financier with a variety of companies and holds or has held executive or non-executive roles in corporate finance, strategic advice, TV advertising, financial services, health, property, internet services, mineral exploration & development, investment and manufacturing companies.

 Europa Oil & Gas (Holdings) plc has only one class of securities (ordinary shares) and has not applied or agreed to have any of its securities admitted or traded on any other exchange or trading platform.

Shareholdings in the company greater than 3% as at 24 January 2017:

 

HSBC Global Custody Nominee (UK) Limited <898873> 14.50%
Barclayshare Nominees Limited 8.98%
TD Direct Investing Nominees (Europe) Limited 6.49%
Hargreaves Lansdown (Nominees) Limited <HLNOM> 6.13%
HSDL Nominees Limited 5.36%
HSBC Client Holdings Nominee (UK) Limited <731504> 4.02%
Hargreaves Lansdown (Nominees) Limited <VRA> 3.89%
Huntress (CI) Nominees Limited <KGCLT> 3.03%
Hargreaves Lansdown (Nominees) Limited <15942> 3.00%
WB Nominees Limited 3.00%

 

Addresses
Registered Office
Europa Oil & Gas (Holdings) plc

UK Office
6 Porter Street
W1U 6DD
T: +44 (0)20 7224 3770
E: mail@europaoil.com

Financial PR
St Brides Media & Finance Ltd
Frank Buhagiar & Lottie Brocklehurst
T: +44 (0)20 7236 1177
E: info@sbmf.co.uk

Broker and NOMAD
finnCap
60 New Broad Street
London EC2M 1JJ
Matt Goode / Simon Hicks / Joanna Weaving +44 207 600 1658

Registrar
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH

Solicitors to the Company
Charles Russell LLP
5 Fleet Place
London EC4M 7RD

Auditor and Reporting Accountants (Registered as auditors by the Institute of Chartered Accountants in England and Wales)
BDO LLP
55 Baker Street,
London W1U 7EU

Investor Relations
St Brides Partners Ltd
3 St Michael's Alley
London, EC3V 9DS
United Kingdom

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