Big Picture – A Deep Dive Examination of Europa Oil & Gas (Holdings) Plc
Europa Oil & Gas (Holdings) Plc Snapshot
- Europa Oil & Gas (Holdings) plc is an AIM listed oil and gas company with a diverse portfolio of hydrocarbon assets at various stages of the development cycle including exploration and production in the UK and Ireland.
- Europa is a leading explorer in Atlantic Ireland with six high impact exploration licences.
- Estimated combined gross mean unrisked resources of 4.2 billion barrels of oil and 1.5 tcf of gas in Atlantic Ireland.
- Approximately 97 barrels of oil per day are currently produced from three onshore UK oilfields and 150 bopd under development at Wressle.
Europa is run by a highly experienced management team with a proven track record in generating substantial shareholder value.
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.
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.
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.
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...
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.
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.
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.
Simon Oddie, Non-Executive Chairman Simon has over 40 years of experience as a petroleum engineer, technical consultant, manager and investment adviser in upstream oil and gas. He has worked with Schlumberger, ERC Energy Resource Consultants, Enterprise Oil and Gemini Oil and Gas Advisors LLP and gained extensive experience in technical, senior management and finance functions. He was CEO of Enterprise Italy and architect of the Gemini Oil and Gas royalty funds and has a proven track record in dealing with investors, and initiating and executing oil and gas deals. Simon completed the Advanced Management Program at Harvard Business School, holds an MSc. in Petroleum Engineering from Imperial College and a BSc (First Class) in Electronics from Manchester University.
Brian O'Cathain, Non-executive Director Brian is a geologist and petroleum engineer with over 30 years' experience in senior technical and commercial roles in upstream oil and gas E&P companies, including Shell International, Enterprise Oil and Tullow Oil plc. He has experience in working in West Africa, North Africa, onshore Europe, the North Sea, the Gulf of Mexico, South Asia and offshore Ireland. He was the Managing Director of Tullow Oil's International Business during the Energy Africa acquisition, and served as Chief Executive of Afren plc from 2005 to 2007. He was also the Chief Executive of Petroceltic International plc from 2007 to 2016. During this period Petroceltic discovered the Ain Tsila gas condensate field in Algeria, and concluded a nil-premium merger with Melrose Energy. Mr O'Cathain holds a first-class honours degree in Geology from the University of Bristol.
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.
Shareholdings in the company greater than 3% as at 17 May 2018
|HSBC Global Custody Nominee (UK) Limited <898873>||11.25%|
|Hargreaves Lansdown (Nominees) Limited <HLNOM>||8.04%|
|Barclays Direct Investing Nominees Limited <Client1>||7.99%|
|Interactive Investor Services Nominees Limited <Smktnoms>||7.56%|
|Hargreaves Lansdown (Nominees) Limited <VRA>||6.10%|
|HSBC Global Custody Nominee (UK) Limited <800757>||4.38%|
|HSDL Nominees Limited||4.30%|
|Hargreaves Lansdown (Nominees) Limited <15942>||3.53%|
|HSDL Nominees Limited <MAXI>||3.34%|
|Huntress (CI) Nominees Limited <KGCLT>||3.10%|
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