Proactiveinvestors United Kingdom Europa Oil & Gas newswires

Shale seen as potential solution to UK's energy crisis

Mon, 07 May 2012 13:30:00 +0100

The fact that oil giant Royal Dutch Shell (LON:RDSB) confirmed in recent weeks its interest in UK shale points to the growing significance of this energy source.

Finance chief Simon Henry was quoted as saying Shell was "taking a look" at the potential in the UK stating that unproven estimates of 200 trillion cubic feet meant it was a "play" the oil major "could not ignore".

But Henry also nodded to the environmental and social challenge involved in fracking the gas (the process to extract it from the rock) - a technique which has recently hit the headlines.

Exploration is still in its infancy but two years ago a British Geological Survey (BGS) study concluded that the shale gas potentially recoverable for the UK could be 5.3 trillion cubic feet - a far cry from the 200 trillion figure, but nevertheless, a huge amount.

To put the figure into context, this is almost two years' worth of the UK's overall gas consumption.

Shale gas could really come into its own as the UK's energy debate looks set to continue and more and more money is spent on phasing out traditional methods of producing energy.

Coal-fired power is being eased out, which leaves gas at the top of the list of alternatives. But the nation is currently a net importer of gas from places like Russia and Norway, leaving it exposed to the whims of international markets.

This means producing it from the country's own resources has never been so important.

Shale is a type of fine rock in which the gas lies, and, to extract it, a process called hydraulic fracturing, or "fracking" is used. This sees fluid pumped into the rock to create fractures to allow the gas to come out.

Previously, such reservoirs were not exploited by firms as they were thought to be economically unattractive.

But all that has changed with the development of US horizontal drilling technology, which transformed the economics, and indeed, shale gas production across the pond has increased rapidly in the last three years.

By 2035, it is expected to account for 50 per cent of US output.

So called "fracking" has certainly been in the spotlight recently, not least due to the large number of people, here in the UK, who oppose the process on environmental grounds.

Last year, privately owned company Cuadrilla Resources made a huge shale discovery near Blackpool - reportedly big enough to supply the UK for 56 years.

Its work was responsible for what residents of the seaside town described as two ‘earthquakes’ and the firm's drill programme was put on hold.

Last month, however, it was given the green light to drill again, but under tighter regulatory controls.

Director General of the Institute of Directors Simon Walker had said at the time of the drilling resumption that shale gas was a low-cost fuel offering, "a great opportunity to fill the energy gap left by the closure of coal-fired power stations and the unreliability of renewables".

The go ahead for Cuadrilla also put two AIM quoted stocks, IGas Energy (LON:IGAS) and Europa Oil & Gas (LON:EOG) into focus and shares in both companies went up.

In January this year, IGas found what it described as a very "significant" amount of shale gas in a well in Cheshire, which was targeting coal bed methane (CBM) - another form of unconventional natural gas. The Ince Marshes well is only a few miles away from Cuadrilla’s operations.

Meanwhile, Europa has more than 600 square kilometres of prospective shale gas acreage in the Humber basin, near its conventional oil production operation.

While this acreage is being evaluated, Europa says it plans to monitor the other shale gas exploration activities with interest.

Another company, focused on unconventional gas, is Australia-listed Dart Energy (ASX:DTE), which is restructuring its operations in Britain.

In a recent announcement, it said it had decided to take up an option over two licences in Germany, Saxon 1 and 2, offered by BG, as part of this restructuring.

Both licences are believed to be prospective for both CBM and shale with a multi-TCF gas in place potential in aggregate. The licences were acquired for no cost.

While the precise way in which UK shale gas will shape the country's future energy needs is uncertain, what is clear is that is likely to remain firmly on the news agenda for some time to come.

Europa Oil & Gas looks at drilling up to 3 high-impact wells in next 18 months

Thu, 19 Apr 2012 08:35:00 +0100

Europa Oil & Gas (LON:EOG) is looking at drilling drill up to three high impact wells in the UK over the next 18 months.

In its interim results statement, the group said this work is anticipated to commence in the second half of this year with the Wressle prospect in the UK, which it rates as having a one in three chance of adding materially to its current oil production average of approximately 200 barrels per day.

In addition, discussions are progressing towards conclusion of two farm-out agreements which could lead to a further two wells in the next 18 months.

During the six month period to January 31 2012, Europa saw a 61 per cent increase in revenues to £2.4 million compared to £1.5 million a year earlier.

A 23 per cent year-on-year increase in volumes to 187 barrels of oil per day during the period combined with a 39 per cent increase in the oil price lay behind the strong performance.

The contribution from the West Firsby WF-9 well along with reduced downtime caused by breakdowns, drilling activities and adverse weather also contributed to the jump in production.

Since the period end, the good performance of the UK producing assets has continued: February production was 231 bopd, the highest monthly production rate since November 2008, and in March, the average was 222 bopd.

Europa’s appeal against Surrey County Council refusing permission to drill an exploration well to test the Holmwood prospect on the PEDL 143 licence is due to be heard in July 2012.

Subject to a favourable ruling, the company is looking to drill the exploration well in 2013.

In France, it holds 100 per cent interest in two permits with both development and
exploration potential in the Aquitaine Basin, adjacent to the producing Lacq-Meillon gas fields.

The Béarn des Gaves permit contains a sizeable deep gas play that has previously been explored by operator Elf in the 1980s. Re-interpretation of existing seismic has identified a previously unknown shallow gas play.

Europa has divided the licence into a deep and shallow play and is in talks with potential partners for both the shallow and the deep gas play.

At the same time, farm-out discussions are ongoing with potential partners for the Tarbes Val d'Adour permit.

Following its withdrawal from the Cuejdiu licence in Romania since the end of the first half, Europa has interests in two further concessions in Romania, wholly owned Brates and 19 per cent in Bacau.

Bacau is operated by Raffles Energy and a review of existing data is currently underway.

Europa also holds interests in Western Sahara licensed by the Sahrawi Arab Democratic Republic. The 100 per cent held licence covers almost 80,000 square kilometres and has significant potential for both conventional and unconventional gas resources, specifically shale gas.

The company is currently looking to farm-out its interest in the licence and an announcement will be made in due course.

Europa Oil & Gas boosted by higher output and prices

Wed, 08 Feb 2012 07:28:00 +0000

UK-onshore oil group Europa Oil & Gas (LON:EOG) saw first half revenues jump by almost two-thirds as output and prices both rose.

Turnover jumped by 61 per cent to £2.1 million in the half year to January 31 as volumes from its three producing fields rose by 23 per cent to 187 barrels per day.

Income was also boosted by a 39% rise in oil prices to US$108.9 per barrel.

The company currently has three producing assets all located in the East Midlandsand consisting of a 100% working interest in the West Firsby and Crosby Warren fields and a 65% working interest in the Whisby 4 well.

Higher output reflected the West Firsby WF-9 well coming on stream and reduced downtime after the blizzards had affected the the previous year.

Hugh Mackay, chief executive, added that daily production has been consistently higher than the previous year despite a recent workover programme for the West Firsby 7 well.

“Our UK production continues to generate more than enough cashflow to cover our operating costs and provides a solid foundation from which we can develop our other highly exciting assets.”

“Little or no value is being attached to our highly prospective portfolio of exploration and development assets that include the Berenx gas appraisal project and the Tarbes Val d'Adour re-development project, both of which are located in France.”

Management is committed to realising the inherent value of Europa’s portfolio, he added.

Europa Oil & Gas expects West Firsby 7 well back online early 2012 after brief suspension

Fri, 16 Dec 2011 16:20:00 +0000

Europa Oil & Gas (LON:EOG) has suspended production at the West Firsby 7 well in the East Midlands, UK, but has taken action and expects the well to be back in production early in the New Year.

The group told investors that the well has been shut in due to a suspected hole in a section of the tubing.

A workover programme is being submitted to the Health & Safety Executive for approval and a rig has already been booked to carry out the necessary repairs. There is no evidence of any leakage of oil at the site and the company anticipates that West Firsby 7 will be back in production early in the New Year.

Prior to the shutdown, the average daily production had been running at approximately 200 barrels of oil per day (bopd). As a result of the temporary shutdown of West Firsby 7, daily production is now running at 130 bopd.

Assuming the workover programme is completed on schedule, Europa expects daily production for the six months to January 31 2012 to average 185-190 bopd.

Chief executive Hugh Mackay said: "I am confident that the swift action we are taking to resolve the issue will limit the overall impact of the shutdown on our first half's production levels.

“In the meantime, we are continuing with our strategy of progressing our high quality exploration portfolio through the development cycle and I look forward to reporting significant progress in this regard to the market in the New Year."

Europa 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.

The company generates sufficient revenues from UK production to cover corporate overheads.

In addition, it has highly prospective exploration projects in the UK, Ireland, France and Romania, the most significant asset being the 1.7 trillion cubic feet, US$2.2 billion Berenx gas appraisal project in onshore France.

Europa Oil & Gas submits appeal against Holmwood planning refusal

Tue, 13 Dec 2011 07:40:00 +0000

Europa Oil & Gas (LON:EOG) said it has formally submitted the appeal against the decision to refuse planning permission for the Holmwood-1 exploration well in Surrey and has completed the sale of Europa's Ukrainian subsidiary Europa Nafta & Gas Ltd.

In a statement prepared for today’s AGM, chief executive Hugh Mackay. who joined the group in August this year, updated shareholders on the latest development for the oil and gas exploration and development company with a combination of producing and exploration assets in onshore Europe.

Europa holds a 40 percent working interest in the Holmwood-1 well. The Planning Committee of Surrey County Council refused planning permission for the well in May. Europa said at the time the the vote was very close and it plannned to appeal.

It considers the initial proposal technically strong, fully supported by the County's own planning officers and as such the refusal is thought likely to be overturned on appeal.

The PEDL143 onshore licence, which hosts the Holmwood prospect, is being explored through a joint venture. Europa is the operator, Egdon Resources have a 40 percent stake and privately owned Warwick Energy owns the remaining 20 percent.

The sale of Europa Nafta & Gas to Moltex Business Inc was completed on December 1 2011 with Europa receiving a final cash payment of US$98,750 on December 5.

In the AGM statement, Mackay said his predecessors at Europa successfully built up a highly attractive portfolio of assets at various stages of the development cycle ranging from production in the UK that generates revenues sufficient to cover the corporate overheads, to exploration licences that include a potential company-maker in the form of the Berenx gas asset in France.

“However, following a poor run in the share price over the past year, the market capitalisation of Europa at today's levels merely reflects the value of the producing UK assets. Effectively, no value is currently being placed on our highly prospective exploration assets. Admittedly, there has been poor news flow over the last year, notably in the UK
and Romania, but the quality and balance of the portfolio remains intact,” the CEO said.

He said the group is actively discussing possible farm-outs for several of Europa’s projects with a number of interested and suitable partners.

"Although 2011 has been a challenging year for the company and a highly frustrating one for our shareholders, importantly Europa continues to be profitable at the operating level and still holds highly prospective exploration licences.

“These two points lay behind my decision to not only join Europa but also to accept a remuneration package based on a share price that is considerably higher than today's levels, so aligning myself with existing rather than new shareholders. With this in mind, I am extremely excited for the future and expect to report this time next year, meaningful progress in the development of our assets,” Mackay added.

Europa Oil & Gas has assets onshore UK, Romania and France and offshore Ireland.

Europa Oil & Gas chairman Bill Adamson buys shares in company

Tue, 22 Nov 2011 07:23:00 +0000

Chairman of Europa Oil & Gas (LON:EOG) Bill Adamson now holds 0.24 per cent of the company, it emerged.

The firm said that yesterday (November 21) Adamson bought 150,000 company shares at 6.7 pence each for around £10,000.

Following the purchase, he is interested in 325,000 shares - or 0.24 per cent of the firm's share capital.

Earlier this month, on November 15, the firm's chief executive Hugh Mackay upped his stake in the company.

He bought 132,501 shares in the company at 8.25 pence each for around £11,000, the firm told investors and now holds 0.43 per cent of the company's share capital.

Europa Oil & Gas has assets onshore UK, Romania and France and offshore Ireland.

Last month, it raised around £700,000 through an oversubscribed placing to strengthen its balance sheet and for working capital.

The proceeds, the firm said, would be used to supplement the company's existing cash resources in funding its near-term working capital requirements and to strengthen the balance sheet in the light of a Romanian VAT liability.

Europa Oil & Gas' chief executive Mackay buys shares in company

Wed, 16 Nov 2011 07:48:00 +0000

Europa Oil & Gas (LON:EOG) revealed this morning that chief executive Hugh Mackay had upped his stake in the company.

Yesterday (November 15), Mackay bought 132,501 shares in the company at 8.25 pence each for around £11,000, the firm said.

Following the acquisition, he holds 0.43 per cent of the company's share capital.

Europa Oil & Gas has assets onshore UK, Romania and France and offshore Ireland.

Last month, the firm raised around £700,000 through an oversubscribed placing to strengthen its balance sheet and for working capital.

The proceeds, the firm said, would be used to supplement the company's existing cash resources in funding its near-term working capital requirements and to strengthen the balance sheet in the light of a Romanian VAT liability.

Europa Oil & Gas strengthens balance sheet with £700,000 institutional placing

Tue, 25 Oct 2011 08:05:00 +0100

Europa Oil & Gas (LON:EOG) says it has raised around £700,000 through an oversubscribed placing for working capital and to strengthen its balance sheet.

The firm's broker finnCap raised the funds through the placing to institutional investors of around 7.77 million new shares at 9 pence each - a discount to yesterday's closing price of 9.5 pence.

The proceeds will be used to supplement the company's existing cash resources in funding its near-term working capital requirements and to strengthen the balance sheet in the light of the recently announced Romanian VAT liability, said the company.

On September 27 this year, the firm told investors that it would be assessing all of its projects to prioritise capex spending in the months ahead after it received a €730,000 tax bill for a transaction dating back to 2007.

It revealed that it had received notification from the Romanian tax authorities requesting immediate payment of VAT relating to the sale of the Bilca Gas field in 2007. The sum of €730,000 includes penalties.

In a statement, the firm, which has assets onshore UK, Romania and France and offshore Ireland, had said: "The company intends to submit an appeal to the Romanian tax authorities and has received advice from its tax advisers KPMG that it has a strong technical argument for its counter claim."

But the firm added that the appeal process was likely to take several months and it will have an effect on cashflow. In the meantime the group will be assessing all projects to prioritise capex spend.

On the placing announced today, chief executive of Europa Hugh Mackay said: "We are pleased at the ongoing support of the market for the company, as evidenced by the level of interest in this fundraising, and we intend to deploy these funds to continue to build on the progress the company has made over the last few months."

Europa Oil & Gas sees unlocked potential across its asset inventory

Fri, 21 Oct 2011 08:27:00 +0100

Europa Oil & Gas (LON:EOG) said there is unlocked potential across its assets in Europe, as it released its annual financial report.

The firm said there was a "conveyor belt" of exploration work for it to undertake in coming years and highlighted oil exploration in the UK and Romania as well as the potential for large gas developments in the Aquitaine area of France and the Romanian Carpathians.

The company also said today that managing director Paul Barrett has resigned from the board with effect from today, having notified the company of his resignation in April this year.

For the 12 months to July 31 this year, the company posted revenue of £3.8 million compared to £3.1 million last year.

Pre-tax profit from continuing operations came in at £0.3 million - an improvement on a loss of £1.7 million last year.

Meanwhile, net cash and equivalents at year-end stood at £1.9 million compared to a debt of £0.5 mln in 2010.

Running through the post-period highlights, the firm said that Hugh Mackay had been hired as chief executive on October 10.

The firm spudded the Horodnic-1 well the next day (October 11) to evaluate the Voitinel gas discovery in Romania, looking to prove up the minimum gas volume for commercial development. The well followed up the Voitinel-1 discovery well, which flowed 3 million cubic feet per day in 2009.

Most recently, Europa was awarded two new exploration licensing options over prospective acreage in the porcupine basin, off the west coast of Ireland.

These licence options each comprise two four-block parcels. In total the area covers 2,000 square kilometres. The exploration area is situated on the margins of the Porcupine Basin, in water depths between 700 and 2,000 metres.

Previous drilling in the basin led to the discovery of the Connemara, Spanish Point and Burren oil and gas fields, thus proving a viable petroleum system.

"The focus is now on the potential for large stratigraphic traps similar to those that have been highly successful elsewhere along the Atlantic Margins. Consequently, we are excited by this award and are looking forward to developing drillable prospects in these areas." the firm said today.

The firm also highlighted today that the firm's portfolio had been built up over many years on the basis of conventional oil and gas potential, although it was clear that areas prone to conventional hydrocarbons generally have potential for unconventionals too.

"Europa's solid portfolio has much to offer - continued production, undeveloped discoveries, quality exploration prospects and the prospect of unconventional hydrocarbons," it added.

Europa Oil & Gas gets new Irish acreage in Porcupine basin

Mon, 17 Oct 2011 10:36:00 +0100

Europa Oil & Gas (LON:EOG) has been awarded two new exploration licensing options over prospective acreage in the porcupine basin, off the west coast of Ireland.

These licence options each comprise two four-block parcels. In total the area covers 2,000 square kilometres. The exploration area is situated on the margins of the Porcupine Basin, in water depths between 700 and 2,000 metres.

“This is an excellent addition to the already strong portfolio of E&P projects in Europa and I look forward to developing drillable prospects in these areas,” said chief executive Hugh Mackay.

Europa said that the options have modest work programmes during an initial two year period, which can be converted into a 15 year frontier exploration licence to undertake seismic and drilling operations.

The Porcupine basin, which already hosts a number of known oil discoveries, is expected to come sharply into focus over the next year or so as a group of companies led primarily by Providence Resources (LON:PVR) explore and appraise the waters around Ireland.

“I am very pleased to have secured attractive acreage for the next phase of the company's exploration effort,” managing director Paul Barrett added.

“It represents a prime opportunity to develop a strong prospect inventory in an exciting Atlantic Margin play, additionally benefitting from its location in a low tax EU jurisdiction.”

Europa Oil & Gas spuds second well on Voitinel gas discovery

Wed, 12 Oct 2011 09:09:00 +0100

Europa Oil & Gas (LON:EOG) has spudded the Horodnic-1 well to evaluate the Voitinel gas discovery in Romania, looking to prove up the minimum gas volume for commercial development.

The Horodnic-1 well follows-up the Voitinel-1 discovery well, which flowed 3 million cubic feet per day in 2009.

If successful, Horodnic-1, which is the second well on the Voitinel discovery, will be followed by a further well to test the potential of the Voitinel-Solca trend on the licence, which EOG believes may contain significant gas reserves.

The company added that this further well will likely be drilled on the Solca part of the trend, to the south of Voitinel.

“The drilling of this well is an important step in the evaluation of the Voitinel gas discovery,” said managing director of Europa Oil & Gas Paul Barrett.

“A good gas test in this well will add much value to the project and underline the resource potential in the structure, giving the partnership the confidence to push forward on appraising the upside in 2012.”

The Horodnic-1 well is expected to reach its target depth in around 30 days.

EOG is currently carrying out a 2D seismic acquisition programme in the thrustbelt oil play of the Brodina licence immediately west of Voitinel. The results of this programme will serve as the basis for the 2012 exploration programme.

Europa holds a 28.75 percent working interest in the Brodina licence, which is operated by Aurelian Oil & Gas (LON:AUL).

Last month, EOG told investors that it is finalising a deal with a potential farm in partner for the Brates licence, where it has plans to deepen the Barchiz-1 well, which was drilled in late 2010 but failed to reach the primary target.

The markets welcomed the news as shares in EOG rallied 6.5 percent to trade at 10.5 pence in early deals, valuing the company at £12.85 million.

Europa Oil & Gas to prioritise capex as it appeals Romanian tax bill

Tue, 27 Sep 2011 07:58:00 +0100

Europa Oil & Gas (LON:EOG) told investors that it will be assessing all of its projects to prioritise capex spending in the months ahead after it received a €730,000 tax bill for a transaction dating back to 2007.

The group said that it received notification from the Romanian tax authorities requesting immediate payment of VAT relating to the sale of the Bilca Gas field in 2007. The sum of €730,000 includes penalties.

“The company intends to submit an appeal to the Romanian tax authorities and has received advice from its tax advisers KPMG that it has a strong technical argument for its counter claim,” Europa said in a stock market statement.

According to Europa the appeal process is likely to take several months and it will have an effect on cashflow. In the meantime the group will be assessing all projects to prioritise capex spend.

Additionally this morning Europa detailed investors on its operations in Romania, where among other things it is currently carrying out a 2D seismic acquisition programme on its Brodina and Cuejdiu blocks.

It said that an appraisal well, known as Horodnic-2, will be spudded on the Voitinel field in the ‘very near future’.

Horodnic-2, which has previously been called Voitinel-2, follows up the Voitinel-1 discovery well which flowed 3 million cubic feet per day in 2009. Europa considers that this will be a low risk appraisal well designed to prove a minimum gas in place number for commercial development, well below the upside potential for the play of 415 billion cubic feet.

It is also finalising a deal with a potential farm in partner for the Brates Licence, where it has plans to deepen the Barchiz-1 well, which was drilled in late 2010 but failed to reach the primary target.

It is anticipated that Europa's future share of the well cost will be fully carried up to an agreed cap through the farm-in deal. The group said it expects to make a further announcement regarding the farm in during ‘the coming weeks’.

Europa Oil & Gas appoints Hugh Mackay as new CEO

Thu, 11 Aug 2011 08:16:00 +0100

Hugh Mackay is to become the chief executive officer of Europa Oil & Gas (LON:EOG) it was revealed today.

Experienced Mackay has been appointed CEO and director by the firm, which has assets in Romania, France and the UK, and will take up the position on October 10 this year.

Europa's chairman Bill Adamson said: "We are delighted that Hugh has accepted our offer to join us.

"His track record shows that he has the right skills and experience in senior management positions, oil and gas project development, and entrepreneurial flair that Europa needs as it enters an exciting period in its development."

Mackay, a Geology graduate, has a wealth of experience in the oil and gas sector, including eight years at BP in a variety of roles culminating in head of the south east Asian division.

He played a pivotal role in the development of the Peak Group and its eventual sale to AGR Petroleum Services, said Europa Oil & Gas.

More recently, he was founding chairman of Avannaa Resources, a mineral exploration company focused on grass roots exploration in Greenland.

In April this year the company revealed it was looking for a CEO after the resignation of managing director Paul Barrett.

After 16 years with the company, Barrett signalled that he intended to step down to pursue other interests, Europa had said.

He plans to stay with the company during his 12 month notice period "in order to effect an orderly handover", the firm had added.

He will continue to oversee the planned exploration, appraisal and development work programme on the company's assets in the UK, Romania and France.

Europa Oil & Gas gets approval to drill deeper in Barchiz-1 exploration well

Wed, 20 Jul 2011 07:39:00 +0100

Europa Oil & Gas (LON:EOG) says it has received the necessary approvals to deepen its Barchiz-1 exploration well on its 100 percent EPI-3 Brates block in Romania.

This is aimed at testing the target thought to lie beneath the current 1,450m depth of the well, said the company in an update about its Romanian operations and their timings over the next six months.

The company holds interests in four Romanian exploration licences in the Carpathian petroleum system, with non-operated working interests varying from 17.5 to 28.75 percent.

Its strategy in Romania is moving away from small shallow gas play in the eastern part of the licences to explore the thrust belt oil play in the western part of the licences.

The company said today that this year's seismic programme is underway, with the EIII-3 Cuejdiu area, of which Europa owns 17.5 percent, acquisition now more than 70 percent complete.

A seismic programme on the EIII-1 Brodina block, in which the firm holds a 28.75 percent stake, which contains the Voitinel gas discovery, will follow on from this survey.

Aurelian Oil & Gas (LON:AUL), which operates Brodina, has advised partners that the Voitinel appraisal well is due to spud on or around 1st October this year. A further well is expected to be drilled, subject to the results, in early 2012, added the company.

Managing director Paul Barrett said: "These Romanian projects are coming together to create a significant amount of activity for the remainder of 2011 and we hope to exit the year with greater reserves and contingent resources."

At the end of last month, the company announced that it was set for a cash boost as it unveiled plans to raise £2.1 million in a share placing, as well as other financing arrangements totalling £6 million.

The money is being earmarked for the groups near-term work programmes in the UK, Romania and France.

Europa Oil & Gas boosts cash position with new funding arrangements

Tue, 28 Jun 2011 15:20:00 +0100

Europa Oil & Gas (LON:EOG) is set for a cash boost as it unveiled plans to raise £2.1 million in a share placing, as well as other financing arrangements totaling £6 million.

The money is being earmarked for the groups near-term work programmes in the UK, Romania and France.

It is issuing 16.1 million new shares, which is about 12 percent of the enlarged share capital, priced at 13 pence each – a 6 percent discount to yesterday’s closing price.

Meanwhile it has made other financing arrangements with Yorkville Advisors, via its Global Master fund. It has signed up for a US$1.6 million (about £1 million) loan note and it has also agreed to take a £5 million equity line facility– that’s referred to as a Standby Equity Distribution Agreement (SEDA).

Typically these SEDA’s allow listed companies to issue new shares to the Yorkville fund as and when required, subject to the specific terms of the agreement.

The agreement with Yorkville will last for up to three years, it can issue new shares at a maximum discount of 5 percent to the prevailing price and the maximum number of shares cannot exceed 200 percent of the daily average trading volume.

A total of £3 million will be spent on the group’s three territories.

In the UK Europa plans to spend £400,000 on hydraulic fracture stimulation work on the Crosby Warren-1 well, so that it can improve production.

“The well responded extremely positively to an initial frac some years ago, however the effectiveness of the original frac has diminished and it is the directors' belief that a new frac will revitalise production,” Europa said.

The company recently agreed a deal with its partners at Crosby Warren, Egdon Resources (LON:EDR) and Celtique Energie Petroleum, to equalise working interests across the field. Subsequently Europa will own a 33.33 percent stake.

It also plans to spend £300,000 on 3D seismic work in the area, specifically looking at the Wressle prospect. The programme will aim to ‘firm up’ drill targets that will be tested next year as part of a multi-well drilling programme in the East Midlands.

Meanwhile £1.9 million has been earmarked for work in Romania, with £1 million being spent on 2D seismic work on the Brodina and Cuejdiu licences and £900,000 being spent on the reserve appraisal of the Voitinel-2 well.

Europa also said that its future plans also include the deepening of the Barchiz-1 exploration well in Romania, and a 3D seismic programme on the Berenx asset in France.

The Barchiz-1 work programme will be funded by be funded either from existing cashflow, the use of the SEDA facility or, alternatively, a farm down of the asset to a third party.

UPDATE: Europa Oil & Gas issues positive operations update

Fri, 10 Jun 2011 07:58:00 +0100

UPDATE: With broker comment....

Europa Oil & Gas (LON:EOG) put out an encouraging update today noting that operational and weather related issues which hurt production in the UK earlier in the year have been alleviated.

In its warning in March the group said that production at its West Firsby operation in Lincolnshire had been hit by adverse weather and operational issues, with average production for the six months to January 2011 down to 151bopd.

Today it said that since then production has increased some 100% to a current average of 260bopd. Gross revenues for the operation are currently running at $750,000 per month.

The group has 13 oil and gas exploration and production assets mainly across the UK, Romania and France. The update today also assured that its appraisal projects in Romania remain on track, with its Voitinel-2 well likely to be spudded in September to prove up to 35 billion cubic feet of gas-in-place. That would allow for the initiation of a pilot production project for the northern part of Voitinel.

A second appraisal-exploration well, between the Voitinel and Paltinu gas discoveries, is expected to be drilled in early 2012.

As for its flagship appraisal project Berenx in France, work has been underway for several weeks on the engineering design for a Berenx-3 appraisal well in late 2012/early 2013.

Things are also looking promising for the Lacq Quest gas field, nearby Berenx, with continuing encouraging exploration and assessment data. The company anticipates results from a key 3D data survey will be acquired in the fourth quarter of 2011 which, if positive, will enable the company to choose a firm well location the second quarter of 2012.

On the UK exploration front, Europa, Egdon Resources and Celtique Energie have agreed to equalise working interests across contiguous licences PEDL180 and PEDL182, situated to the south and east of Crosby Warren. This will increase Europa's overall exposure to the play.

The company is also looking to appeal against a decision by the Surrey Planning Committee to overturn the County Planning Officer's recommendation to allow exploration drilling at Holmwood.

As for exploration work in Romania, the company is aiming to secure official approval to advance appraisal of its Barchiz-1 oil discovery well by deepening it. Europa hopes approval will be given shortly and that the well can be deepened in October.

Paul Barrett, managing director of Europa, said: “This update demonstrates our strong conveyor belt of appraisal and exploration projects for the remainder of 2011 and beyond.”

Barrett said the plan for the next 18 months is shaping up to see Europa drill up to three exploration wells with a net resource potential of up to 48 million barrels of oil and to appraise up to 80bcf net contingent resource. It is also aiming to be in a position to drill a well on a 1.7 trillion cubic feet potential net resource onshore France.

Responding to the statement broker finncap said that while UK production has not yet reached expected levels, Europa remains profitable at current rates and is well placed to exploit an attractive
portfolio of opportunities during the next 18 months.

The broker has revised its 2011 forecasts for the group. It now expects revenues of £4m, down £0.4m from before, on slightly lower production. This decrease is offset by a lower taxation, which is expected to wipe out pre-tax profits of £0.8m, leaving net income at breakeven (unchanged).

With the company generating, at current production levels, $750k per month and assuming limited downtime (unlike in 2011) Europa is well placed for a material increase in revenues and profits in 2012, says finncap.

In early morning trade Europa shares were unchanged at 19.75p, valuing the company at £22.5m.

Europa says it’s likely that Holmwood planning refusal will be overturned

Thu, 26 May 2011 09:49:00 +0100

Europa Oil & Gas (LON:EOG) is planning to appeal against a decision to refuse planning permission for the Holmwood-1 exploration well in Surrey.

This morning it confirmed that the Planning Committee of Surrey County Council refused planning permission needed to drill the well. However Europa said that the vote was very close and it plans to appeal the decision.

On AIM Europa shares fell around 11 percent after the news, before recovering somewhat. At 9:45 the stock was down 1.5 pence, 6.4 percent, trading at 22 pence each.

"We believe the proposal submitted to the Council was technically strong, fully supported by the County's own planning officers and as such the refusal is thought likely to be overturned on appeal,” said managing director Paul Barratt.

The company also stressed the planning officers’ recommendation, in favour of the proposal, came after an exhaustive review of the application. According to Europa this gives it sufficient justification to appeal this decision, on the grounds that the decision to refuse was not made purely on the facts of the case.

The PEDL143 onshore licence, which hosts the Holmwood prospect, is being explored through a joint venture. Europa is the operator with a 40 percent stake, Egdon Resources have a 40 percent stake and privately owned Warwick Energy owns the remaining 20 percent.

Last month Paul Barratt announced his intention to step down from his role as managing director to pursue other interests. He plans to stay with the company during his 12 month notice period in order to effect an orderly handover.

Europa Oil & Gas ups production from West Firsby after WF7 workover

Fri, 06 May 2011 13:48:00 +0100

Europa Oil & Gas (LON:EOG) told investors that it has increased oil production to 250 barrels of oil per day after its latest well came back on-stream at the West Firsby oilfield in Lincolnshire.

This afternoon it confirmed that the West Firsby 7 well, which has been worked over, has now been producing 100 barrels a day for a week, taking the firm’s total production to 250 barrels of oil per day.

Meanwhile it said that the West Firsby 9 well remains on beam pump production, while the fabrication of pipe-work continues for a jet pump system.

Aside from its production assets in the UK Europa also has interest in potentially high-impact projects in Romania and France.

Last month the group said it is planning an appraisal well for the Voitinel gas discovery in Romania later this year and it will also acquire 3D seismic for the Berenx prospect in France.

Plans to appraise the Voitinel gas discovery have progressed following incorporation of the 2010 seismic data into the interpretation model.

The planned appraisal will be designed to prove commerciality of the base case reserves, followed by an exploration well in 2012 in the southern part of the play, the company said in an interim management statement.

In France, recent improved processing and interpretation of existing seismic has confirmed the company's view that Berenx is a very important asset for future value growth.

Acquisition of 3D seismic on the Berenx project is planned for later in 2011 in order to more accurately quantify the upside in this potentially company-making project.

Managing director of Europa Oil & Gas Paul Barrett plans to step down

Tue, 26 Apr 2011 11:07:00 +0100

Europa Oil & Gas (LON:EOG) is looking for a CEO after the resignation of managing director Paul Barrett, the firm announced today.

After 16 years with the company, Barrett has signalled that he intends to step down to pursue other interests, Europa said.

He plans to stay with the company during his 12 month notice period "in order to effect an orderly handover", it added.

He will continue to oversee the planned exploration, appraisal and development work programme on the company's assets in the UK, Romania and France.

Chairman Bill Adamson said: "Paul is a co-founder of Europa and has been instrumental in developing the group and its assets to the current position.

"I'm grateful to him for his early notification, enabling the company to carry out sensible succession planning.

"A search for a CEO will commence immediately and the board looks forward to moving the company to the next stage in its development as a maturing pan-European E&P business."

The company's share price was up 6.5% on the day in early deals - changing hands at 20.50 pence.

Europa Oil & Gas plans appraisal of Voitinel gas discovery later this year

Wed, 20 Apr 2011 08:08:00 +0100

Europa Oil & Gas (LON:EOG) said it is planning an appraisal well for the Voitinel gas discovery in Romania later this year and will also acquire 3D seismic for the Berenx prospect in France.

Plans to appraise the Voitinel gas discovery have progressed following incorporation of the 2010 seismic data into the interpretation model. The planned appraisal will be designed to prove commerciality of the base case reserves, followed by an exploration well in 2012 in the southern part of the play, the company said in an interim management statement.

In France, recent improved processing and interpretation of existing seismic has confirmed the company's view that Berenx is a very important asset for future value growth.

Acquisition of 3D seismic on the Berenx project is planned for later in 2011 in order to more accurately quantify the upside in this potentially company-making project.

During the six months to end-January 2011, the period covered in the IMS, the Barchiz-1 well in the Brates concession area of Romania recovered oil from a shallow reservoir interval.

However, the primary target of the well was not reached for technical reasons and still remains a viable prospect. Europa hopes to be able to deepen the well as soon as practicable.

In the UK, a series of well workovers on the West Firsby field in Lincolnshire brought WF-6 back into production. In December, drilling commenced on the WF-9 development well, targeting a structurally high part of the northern part of the field.

WF-9 tested on beam pump at 80 barrels of oil per day from the lower zone and 40 bopd from the upper zone. The near term objective is to test both zones on jet pump and decide on a long term production strategy. In the meantime, WF-7 has been re-completed following pressure losses due to downhole equipment problems.

On the exploration front elsewhere in the portfolio, there are plans to acquire a 3D survey over the Wressle Prospect in the Easy Midlands, where Europa holds a 50 percent operated interest, as a pre-cursor to drilling an exploration well in 2012.

In the Weald, Europa continues to work towards securing permission to drill the Holmwood exploration well, where it has a 40 percent operated interest, also in 2012.

The Romanian exploration effort continues with the acquisition in 2010 of further seismic in the Carpathian thrust belt oil play in the Cuejdiu and Bacau licences. This will be followed by similar seismic in the Brodina licence in 2011.

Going forward, Europa anticipates further production enhancement of existing wells in the UK, along with appraisal and exploration activity across the three core areas.