Europa Oil & Gas Holdings plc (LON:EOG) today issued an open letter to shareholders in which the explorer detailed a number of upcoming potential catalysts for its offshore Ireland projects.
Following on from a December shareholder meeting, at which a £4.3mln funding was approved, the oil and gas explorer highlighted that the proceeds will enable an exciting programme during 2019 and 2020.
Funds could be further boosted by new partnerships for Europa’s offshore Ireland projects.
In this regard, the Inishkea gas exploration prospects are seen as a priority by Europa and it launched a virtual data room process in late December and it will shortly be supported by an actual data room as the farm-out process continues.
Inishkea was prioritised, partially, because of its proximity to the producing Corrib gas field and Europa’s belief that it has “tcf-scale” potential within ten kilometres from the operating gas infrastructure.
Europa is concurrently negotiating farm-in agreements with a major international oil and gas company (for the LO 16/20, FEL 1/17 and FEL 3/13 oil exploration areas) – and, today, it highlighted that has agreed on terms with the potential partner’s NW Europe division and it awaits a final investment decision from head office.
In terms of operations, Europa said it has started preparing for up to three site survey in the Atlantic, offshore Ireland, which would take place in the summer months. It added that it is engaged with the Irish authorities for the proposed programmes.
It anticipates that the successful conclusion of the survey programmes would set up drilling from 2020 and onwards, subject to project funding.
Europa also highlighted that third-party projects offshore Ireland may in 2019 increase the spotlight on the emerging exploration frontier and potentially de-risk prospects across the region.
Specifically, it noted that China owned Nexen-CNOOC and ExxonMobil will in partnership drill a well this summer to test the Iolar prospect.
According to Europa, success at Iolar would potentially de-risk some 1bn barrels of prospectivity across five prospects in its portfolio. Significantly, it added that it has two prospects (Kiely East and Edgeworth) which could be candidates for immediate follow up drilling if Iolar is a success.
In regards to onshore UK, the company noted that: “the key task is to get planning permission for Wressle and to get this important conventional oil discovery through the appeals process and into production.”
Progress on Wressle has been stifled by the UK planning authorities.
Both the timelines and ultimate future remains uncertain, nonetheless, Europa highlighted that with an initial project start-up pitched at 500 barrels of oil per day, Wressle would potentially see its production increase to over 200 bopd.
It added that such a production rate would generate significant cash flows to the company.
Europa also provided some commentary around its potential ‘new venture’ onshore Morocco where it is presently working with the authorities over a petroleum agreement.
It explained that it is in final stage discussions with ONHYM, Morocco’s national oil firm and regulator, and a meeting is anticipated shortly in Rabat.
The company expects to make a further announcement following a licence award, expected later in the first quarter.