Europa Oil & Gas (Holdings) Plc (AIM:EOG) shares jumped in Monday’s early deals, as it announced a non-binding agreement for a farm-out of its EG-08 production sharing contract offshore Equatorial Guinea.
A heads of terms agreement with “a major energy company” tees up a partnership to drill the Barracuda, which is estimated to host nearly 800 billion cubic feet of gas.
“The signing of these heads of terms is a very positive step forward and comes after an extensive period of negotiations with what we believe is an excellent partner,” said chief executive William Holland.
“Although there are no guarantees, I am confident that we will progress to signing a farm-out agreement in the coming months and will then move to drilling the Barracuda well as soon as possible thereafter.”
Europa holds a 42.9% interest in Antler Global, which in turn owns 80% of the project alongside partner GEPetrol, the national oil company of Equatorial Guinea.
Antler has entered into a non-binding agreement.
Altogether, the exploration block has been estimated to host around 2.12 trillion cubic feet of gas.
In London, Europa shares were up 30% changing hands at 0.65p, valuing the exploration business at around £6.5 million.