Europa Oil & Gas (LON:EOG) expects to advance its ever-growing and ‘multistage’ asset portfolio, even as oil prices remain around the US$40 level.
Interim results, for the six months to January 31, came as the company prepares for the start-up of the UK onshore Wressle oil field - discovered and successfully tested in 2014 and 2015 respectively – and as it continues to build its exciting acreage position in Ireland’s offshore Atlantic Margin.
The oil and gas junior ended the half with £1.8mln of cash. It reported revenue of £600,000, down from £1.3mln the year before, and a pre-tax loss of £600,000.
During the period, the group secured three new onshore licence awards in the UK, and last month the new award offshore Ireland was confirmed.
In the South East of England the group’s Holmwood Well - located adjacent to the high profile Horse Hill oil project - received a positive planning decision and preparations are now underway for an exploration well.
The well is due to be drilled within twelve months.
“The six months under review highlight how well Europa is placed to not just weather the current oil price environment, but also to continue to advance its ever-growing multistage portfolio of licences, even with an oil price of US$40 per barrel,” said chief executive Hugh Mackay.
“Our existing UK onshore production is set to double in the second half of calendar year 2016 once the Wressle discovery comes online.
“As well as providing a significant boost to our revenues, we expect that Wressle will reduce our break-even oil price to approximately US$30 per barrel.
“Combined with no debt and net cash as at 31 January 2016 of £1.8 million, this will provide us with an excellent cash flow generative platform with which to develop our portfolio.”
FinnCap analyst Dougie Youngson said: “Despite difficult market conditions, Europa continues to make good progress across its portfolio. The company is targeting first production from the Wressle field later this year.”
“Europa is also confident that it can secure a drilling partner for its offshore Ireland acreage.”