Shares in onshore UK oil firms advanced on Friday afternoon with thanks to positive news in the planning dispute for an oil project in South East England.
Europa Oil & Gas (LON:EOG) told investors that the planning inspectorate has allowed Europa’s appeal against Surrey County Council which previously declined to give the company permission to drill an exploration well at the site which neighbours UKOG’s Horse Hill project.
Surrey County Council is now expected to make a decision on the application and the proposed path of drilling for the well.
Europa has a 40% stake in the Holmwood project, alongside partners Egdon (LON:EDR) and UK Oil & Gas (LON:UKOG).
“We are pleased with the planning inspector’s decision,” said Hugh Mackay, chief executive of Europa.
“With mean gross un-risked prospective resources of 5.6 million barrels of oil, as estimated in a CPR published in June 2012, and a one in three chance of success, we regard Holmwood as one of the best undrilled conventional prospects in onshore UK and we await Surrey County Council’s decision on the underground well path with interest.”
It has already been a long wait for the oil companies, though looks like they’ll need a little more patience.
The original planning application was submitted in 2008 and was dismissed in 2011.
A subsequent planning appeal was dismissed by the inspectorate in 2012 though this was successfully appealed by Europa in 2013, and that decision was later upheld in 2014.
UKOG, which has seen success nearby with Horse Hill - the so called Gatwick Gusher – and in June it struck a deal to join the partnership.
If the project goes ahead UKOG will earn its 20% stake in the project, which could potentially assess similar targets as the potentially significant Horse Hill well.
To acquire its stake in the acreage UKOG has committed to paying for 40% of the cost of drilling a well (up to a maximum of £1.2mln).
Europa shares gained around 4%, while UKOG added 5.5%.