Europa Oil & Gas (LON:EOG) has raised funds to advance its key projects in Romania and the UK, while reporting that revenues in the full year 2010 rose to £3.1 million.
It was announced today that the company raised £1.5 million before expenses via a placing of 13.36 million shares to fund further drilling at the West Firsby field in Lincolnshire and at the Barchiz-1 well in Romania, while also covering ongoing working capital requirements for the company's other prospects.
“The funds raised from the placing will allow us to push ahead on two fronts: the testing of our oil exploration prospects in Romania and the development of recently identified incremental reserves at West Firsby, both of which are expected to enhance shareholder value,” said managing director Paul Barrett.
The placing shares equate to about 14% of the enlarged issued share capital of the company.
Europa simultaneously released its full year results. Due to write-offs, the company posted losses even though its turnover increased compared to the previous year.
The operational highlights of the year included the drilling of the 28.75% interested Voitinel gas discovery in Romania, which is estimated to have up to 415 Bcf (billion cubic feet) of gas in place.
Europa has also acquired 200 kilometres (km) of 2D seismic data in Romania on thrust belt oil play, upgraded the reserves at West Frisby by 250% to 1.4 million barrels and drilled the Hykeham exploration well.
The company is planning to drill three development wells at West Firsby with the first one scheduled for late 2010, which is expects to allow it to maintain its production target of 500 barrels of oil per day.
Crude sales declined 16% to 64,968 barrels as production was down 16% to 178 barrels per day due to unscheduled well shut-ins at the production sites. Europa said it was currently addressing the problem.
Revenues for the year to 31 July reached £3.1 million, up from last year’s £2.9 million, while total fundraisings amounted to £2.64 million. Losses per share amounted to 2.6 pence compared to a loss of 0.03 pence last year.
Operating performance for the year has been impacted by the £1 million impairment write down and £1 million exploration write-off, which resulted from the decision to write down the carrying value of the Crosby Warren field and the exploration costs incurred primarily in Egypt.
As a result, Europa posted a pre-tax loss of £1.7 million after making a £376,000 profit in 2009.
In 2011, Europa will examine its commercial options regarding large acreage position in the Humber basin and the two licenses on the UK east coast it acquired to investigate underground coal gasification near its conventional assets.