As Europa Oil & Gas (Holdings) Plc (LON:EOG) narrows its focus in on the Inishkea prospects, in the vicinity of Ireland’s Corrib gas field, it has decided to relinquish a portion of its portfolio.
The explorer, in a stock market statement, revealed that it will give up offshore Licence Option 16/21 which covered an area in the Slyne basin, off Ireland’s West Coast.
It said that following initial exploration work the company sees limited potential in the 16/21 area, and, its judgement is that the asset block would compare poorly with other exploration areas in Ireland’s Atlantic Margin.
As such it believes it would be difficult to attract third party fund to a project in the 16/21 area.
Europa retains interests in six licence areas offshore Ireland, with potential undiscovered resources estimated at around 4.7bn barrels oil equivalent.
The priority is focused on Licence Option 16/20, also in the Slyne Basin, which hosts the Inishkea prospects.
Here, Europa is working to advance the exploration prospects to ‘drill ready’ status. To that end, it recently began 3D seismic reprocessing, which is due to be complete in the fourth quarter – and it will be followed by planning for a well programme and a farm-out partnering process.
“Europa is focussed on taking the Inishkea prospects in LO 16/20 to drill ready status and is actively investigating the feasibility of drilling what could be a company-making exploration well in 2019 or 2020,” said Hugh Mackay, Europa chief executive.
“We will not hesitate to exercise technical and commercial judgement and rationalise the portfolio where required.
“Having fulfilled our work programme on LO 16/21, we have elected to relinquish and concentrate our technical resources on the remaining six very high impact exploration licences in our Atlantic Margin portfolio.”
Inishkea efforts advance to target 2019 well
The company has also now commissioned drilling and environmental specialists to engage in the regulatory process to enable a potential drilling programme in 2019.
Europa sees the Inishkea prospects holding a potential 2.5 trillion cubic feet of undiscovered gas initially in place.
Significantly, it described the prospects as being lower risk, in comparatively shallow water, close to gas infrastructure.
He added: “We have one of the largest operated acreage positions in Atlantic Ireland built through first mover advantage against strong competition from the majors.
“We are working hard to maximise the value of this outstanding position and I look forward to updating our investors with progress towards this goal.”