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Europa Oil & Gas expands footprint with new Morocco acreage

The Inezgane project is described as an "excellent technical fit" with the group's Irish portfolio as both contain high potential prospects in Cretaceous plays.

Europa Oil & Gas Holdings PLC - Europa Oil & Gas Holdings expands footprint with new Morocco acreage
Europa has up to four years to drill its first Morocco well

Europa Oil & Gas Holdings PLC (LON:EOG) has expanded its portfolio adding new exploration acreage in the Agadir basin offshore Morocco.

The explorer, in a statement, revealed that it has been awarded an eight-year licence for the Inezgane area, which spans some 11,228 square kilometres. Europa will own a 75% operated interest in the project, carrying government partner ONHYM.

It is described as an ‘under-explored’ area though Europa highlighted that it has already identified the key elements required for a working hydrocarbon system - source, reservoir and seal - are all present.

WATCH: Europa Oil & Gas's Hugh Mackay details new Morocco acreage

Specifically, Europa said that a number of ‘large structural traps located on the edges and above salt diapirs’ throughout the licence area and it plans to mature several of these stacked prospects to drillable status.

Each has the potential to host upwards of 250mln barrels of crude, it highlighted.

As with other assets in the Europa portfolio the strategic plan for Inezgane will be to bring in one or more farm-in partners.

“The Inezgane Permit in Morocco is an excellent technical fit with Europa’s substantial licence position in the Porcupine Basin in Ireland where, among other plays, we are also targeting the Lower Cretaceous,” said Hugh Mackay, Europa chief executive.

He added: “From a technical, commercial and strategic perspective Morocco represents an obvious new country for Europa’s technical team to deploy the first-rate knowledge and understanding of Lower Cretaceous plays it has gained through its work across our industry-leading licence position in offshore Ireland.”

“We now have multiple work streams underway concurrently, all of which have the potential to generate significant value for our shareholders.”

The eight-year licence period breaks down into three phases, the first of which will last two years and requires Europa to reprocess some 1,300 square kilometres worth of 3D seismic data along with other technical studies.

Europa must drill its first exploration well during the second two-year phase or it must otherwise relinquish the acreage.

Quick facts: Europa Oil & Gas Holdings PLC

Price: 1.85 GBX

Market: AIM
Market Cap: £8.23 m

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