Europa Oil & Gas Holdings plc (LON:EOG) shares edged higher on Monday as it told investors that a public inquiry will take place in November to hear an appeal against last year’s denial of planning permission to the Wressle field.
The new hearing is expected to start on 5 November and will last around 5 days.
Chief executive Hugh Mackay highlighted that the Wressle application had been recommended for approval by the North Lincolnshire Council’s planning officer and it was supported by an expert third party review undertaken on behalf of the council.
“The partners [in the project] are not alone in believing the new proposals for the development of Wressle comprehensively address all the points raised by the planning inspector in the original appeal,” Hugh Mackay, Europa chief executive.
“At a proposed initial gross rate of 500bopd, Wressle has the potential to more than double Europa’s existing production to over 200bopd which, with Brent currently trading above US$70 per barrel, would generate a significant revenue stream for the company.
“We are therefore keen to bring this discovery online at the earliest opportunity and with this in mind we are looking forward to the public inquiry in November.”
In a note to clients, analysts at ‘house’ broker finncap commented: “While not critical to the investment case, this is still a valuable opportunity, potentially worth more than a third of Europa’s current market cap. A successful outcome will lead to rapid cash flow and underpin the shares.”
They added: “More material for the share price is the awaited outcome of farm-out negotiations that could see three high-impact exploration wells added to the calendar from 2020. Europa’s risk/reward profile continues to look extremely attractive.”
finnCap repeated a 45p target price on Europa O&G which in afternoon trading were 0.4% higher at 2.85p.
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