Europa Oil & Gas (LON:EOG) has told investors it will retain 100% of its exploration licences offshore Ireland, after partner Kosmos decided to withdraw.
Kosmos has decided to exit the venture, comprising licences FEL 2/13 and FEL 3/13 in the Porcupine Basin.
Hugh Mackay, Europa’s chief executive, said: “Whilst we are disappointed that Kosmos has elected to withdraw from Ireland we appreciate the necessity for portfolio rationalisation in the current business environment and their decision brings opportunity to Europa.”
Europa said its enthusiasm remains undiminished and it is confident there will be interest from other companies in partnering in both licences.
Today’s withdrawal comes after Ireland’s busiest offshore licensing round. Last week, the Irish authorities closed the books on the process which received 43 applications from industry participants – that’s three times as many as the previous round in 2011 and is the most for any Irish licensing.
Europa confirmed it had participated in the process, applying for multiple licences itself.
The AIM quoted company highlighted that as a result of work funded by Kosmos to date it has been the beneficiary of US$15mln of investment – which has primarily been spent on modern 3D seismic surveying.
Earlier this year, Europa estimated its 15% interest in one of the two licences was worth US$1.6bn – based on a prior competent persons report which estimated there to be a prospective 1.5bn barrels in the licence area.
On that basis, as Europa will now take full ownership of the licence its asset value, on paper, will rise significantly.
Mackay says the company has no hesitation in stepping up to assume operatorship of both licences.
“Europa has been active in the Atlantic Margin since 2011,” he added.
“We have a very strong technical team and in particular have conducted substantial and independent technical work on the Atlantic Margin throughout most of 2015 in support of our CPR and valuation and our applications in the 2015 Atlantic Margin Licensing Round that closed on 16 September 2015.
“As a consequence we have an up to date and detailed understanding of the prospectivity of both licences and have no hesitation in stepping up to assume operatorship of FEL 2/13 and 3/13.
“We anticipate that the 2015 licensing round will bring new entrants into the basin including major and mid-cap oil companies. We are very confident in our technical and commercial work and look forward to updating the market as we take these licences forward.”
Antrim Energy, which had also been partnered with Kosmos, similarly today revealed that the Kosmos was leaving that project.
It said the move should be considered in the broader context of Kosmos’s portfolio and markets.
“Despite volatile commodity markets and investment sentiment moving away from exploration we remain optimistic that FEL 1/13 would be an attractive addition to the right exploration portfolio," said Antrim chief executive Anthony Potter.
Antrim said it would work with Kosmos and the Irish authorities to determine how best to move the asset forward.