Europa Oil & Gas (Holdings) Plc (LON:EOG) is continuing to advance its partnership efforts bolstered by its high profile new deal.
The company has signed a farm-out agreement with Cairn Energy PLC (LON:CNE) which will now partner Europa in an early stage exploration project offshore Ireland.
Together Cairn and Europa will shoot 3D seismic in an under-explored area in the Atlantic margin off the west coast.
Cairn is covering costs of the US$6mln exploration programme and in return it will earn 70% of the project (Licensing Option 16/19).
Significantly, LO 16/19 lies adjacent to Europa’s more advanced FEL 2/13 where the AIM quoted group’s prior 3D seismic programme identified some 1.5bn barrels of oil potential across three targets, and it is believed that the farm-out area contains similar features.
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Europa at the same time continues to seek further farm-out deals for its other Irish assets (it has seven offshore licences comprising 20 prospects, estimated in excess of 4bn barrels of oil and 1.5 trillion cubic feet of gas).
Hugh Mackay, Europa chief executive, said: “We are delighted to have secured a farm-in partner of the proven calibre of Cairn, and also to accelerate exploration on the licence through the acquisition of 3D seismic this summer.
“We continue to talk to other potential partners for our remaining six offshore Ireland licences which provide us with exposure to all the various play types being targeted in the region.”
Mackay highlights that oil and gas industry activity is expected to increase markedly in 2017 and beyond – noting that Cairn and Providence plan to drill a well this summer and at least two further wells may be drilled in 2018.
“In terms of acreage and number of licences, Europa is a leading exploration company in Atlantic Ireland with a range of prospects spanning deep water high risk frontier exploration to shallow water, lower risk infrastructure-led exploration next to the Corrib gas field,” he added.
“We believe Europa will benefit from any exploration success in the region either as a trail-blazer or fast-follower.”
Europa shares advanced 1.15p, 24%, on Wednesday morning to trade at 5.9p each.