Europa Oil & Gas Holdings PLC (LON:EOG) had a busy fiscal first-half and the remainder of 2017 looks to be as exciting for the group, with further farm-out deals expected offshore Ireland, and strong potential from its onshore UK assets.
Reporting interim results today, Europa’s CEO, Hugh Mackay said: “Since the beginning of the financial year, a number of farm-outs and sales have been signed across our licence base raising non-dilutive capital for Europa.
“The remainder of 2017 will see Europa participate in high impact development and exploration projects for which our share of the costs is now funded.”
Referring to its offshore Ireland operations, Mackay said: “With drilling set to commence in the region this summer, we are well placed to benefit from any positive results due to a potential de-risking of 4 billon boe of prospective resources in Europa’s licences in the Porcupine.”
He added; “We have landed one farm-out in Ireland and I am confident we will close out more in our other six licences offshore Ireland, as we look to maintain the momentum behind our strategy to monetise our asset base, manage risk and generate value for our shareholders.”
UK potential …
In the UK, Europa’s CEO said the group has “carried on a potentially transformational well targeting the conventional Holmwood prospect, which neighbours the Horse Hill discovery and Brockham oil field in the Weald Basin.
“With a 20% interest, we are materially exposed to considerable upside without having to put any of the Company’s capital at risk drilling the well.”
He added: “Still in the UK and, subject to planning consent being granted, we expect our existing production to almost double to around 220 bopd if the Wressle discovery is brought online following our planning appeal.”
The AIM-listed oil &gas explorer and developer saw its pretax loss narrow to £0.2mln in the six months to January 31, down from a £0.6mln loss at the same stage in 2016 as revenue rose to £0.8mln from £0.6mln.
Europa’s net cash used in operating activities was reduced to £0.3mln, down from £0.5mln a year earlier, with its administrative expenses cut to £218,000 from £355,000.
At the period-end, the firm had a cash balance of £1.4mln, against £1.7mln as at July 31 2016.
In late morning trading, Europa shares were 4.5%, or 0.225p higher at 5.225p.
In a note after the results, Dougie Youngson, analyst at ‘house’ broker FinnCap, said: “2017 will be a pivotal year for the company with Wressle coming onstream, which will reset the company’s breakeven oil price to US$35/bbl and the potential for more farm outs in Ireland driving that part of the portfolio forward.”
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