Europa Oil & Gas (Holdings) PLC (AIM:EOG) has dealt into a new venture, picking up a stake in "drill ready" exploration offshore Equatorial Guinea.
With a US$3 million investment, the company is acquiring a 42.9% shareholding in Antler Global, which in turn owns an 80% stake in the EG-08 production sharing contract in partnership with Equatorial Guinea’s national oil company.
This new venture has “enormous near-term, infrastructure-led, near-field exploration potential”, according to Europa.
"We are very excited about this potentially transformational deal for Europa, which adds another high-impact exploration prospect to our portfolio and ties with our strategic approach to replenishing the portfolio with potentially high impact but relatively low risk prospects,” chief executive Will Holland said in a statement.
The AIM-quoted firm’s injection of capital is expected to cover the first year of work for EG-08, including the acquisition of existing 3D seismic data. Among the first steps will be the reprocessing of this data.
An initial two-year licence period does not come with any obligation to drill, nonetheless, Europa’s plans will put in on a path towards a drill campaign.
Europa highlighted to its investors that EG-08 hosts three separate and independent "drill ready" exploration prospects which, according to estimates, could contain some 1.4 trillion cubic feet of gas equivalent.
Antler is now expected to launch a partnering process, with a farm-out, seeking to secure funding for drilling.
Will Holland added: “Equatorial Guinea is an enormous opportunity for us and provides us with near-term drilling activity targeting over 1 TCFE of recoverable resource in an area with a well-developed upstream industry and a highly supportive government.
“I am also pleased to report that we have solid support from many of our institutional investors for this acquisition."