Europa Oil & Gas (Holdings) PLC (AIM:EOG) told investors it is taking over the operatorship of the Cloughton gas discovery, which is seen by the company as a gas appraisal opportunity.
The operatorship of licence PEDL343, onshore to the north of Scarborough, which hosts Cloughton was transferred to Europa from Egdon Resources, with effect from 27 July, it noted in a statement, whilst the two companies respectively retain 40% of the project each, alongside Petrichor which owns the other 20%.
Discovered in 1986 the Cloughton field was in the past tested at rates of up to 40,000 cubic feet of gas per day, on natural flow, and, according to Europa, it could yield as much as 6mln cubic feet per day through the use of ‘the right’ modern completion and production optimisation techniques.
The produced gas was deemed to be “good quality, sweet gas” the company highlighted, measuring over 98% methane and ethane.
A large volume of gas in place has been discovered to date at Cloughton, Europa added, with the project area seen over a large areal closure and the historic drill result showed some 60 metres of net sandstone reservoir with high gas saturations. A well location has been identified for the proposed project.
Appraisal of the project will largely be about showing contemporary production properties.
If the proposed well testing proves successful, Europa believes the project can be monetised through a connection to the existing nearby gas grid.
"We are very pleased to be assuming the operatorship of what we believe to be a material licence and plan to progress the asset to appraisal drilling operations as quickly as possible,” said Europa chief executive Will Holland.
“There is undoubtedly a significant volume of gas within the structure, which could be brought online relatively quickly and would displace imported gas volumes.
“Domestically produced gas generates employment, local and national tax revenues and has a lower carbon footprint than imported gas. As such development of Cloughton is fully aligned with the UK Governments British Energy Security Strategy and Net Zero 2050 goals.”
Holland added: “I look forward to updating shareholders of our progress as we work through the asset data, refine our estimates for the gas volumes and establish a conceptual development plan."