Europa Oil & Gas Plc’s (LON:EOG) big Irish Atlantic oil and gas ambitions have taken another dent as an unnamed sector ‘major’ walked away from farm-out talks.
The ‘major’, via its NW Europe division, had been in engaged in Europa’s farm-out process for more than a year, but, amidst an internal strategic review the would-be venture partner has now told Europa that the project is no longer under consideration. Europa said talks with other parties continue.
Europa reiterated that the Inishkea gas assets, located near the Corrib project - Ireland’s largest gas field - remain the group's priority as they offer a lower risk ‘infrastructure-led’ exploration opportunity.
Inishkea, estimated to host some 1.5 trillion cubic feet of gas, will in the meantime continue to be advanced towards a slated well drilling programme. The company is working to prepare a well site survey due in summer 2020, as precursor to well drilling in 2021.
“While we cannot comment on timings for the conclusion of ongoing discussions, we remain optimistic that we will secure a partner for Inishkea with whom we can drill what has the potential to be a transformational well for Europa,” Simon Oddie, Europa's interim chief executive officer and executive chairman said in a statement.
Oddie added: “With gross unrisked prospective gas resources of 1.5tcf, a one in three chance of success, a location in a proven hydrocarbon region and lying close to the producing Corrib gas field, Inishkea represents a compelling drill target, one that continues to attract considerable interest from a number of potential partners.”
Earlier this week, Europa was boosted by the news that the Wressle field development, onshore UK, had received a long awaited greenlight in a planning permission dispute.
Europa owns 30% of Wressle which via appeal secure approval.
The project promises to double Europa’s oil production volumes, by delivering some 500 barrels of gross oil production per day.
Oddie today noted: “activity continues across our asset base including working with our partners to bring the Wressle field in the UK into production later this year at an initial gross rate of 500bopd as well as technical work in Morocco focused on reprocessing and interpreting data to build a prospect inventory.
“I look forward to providing further updates on our progress as we look to advance our multi-stage portfolio of assets and in the process generate value for our shareholders.”
The Irish farm-out snub is the latest in a series of disappointments including the withdrawal of prior exploration partner Kosmos Energy, Irish government environmental pledges to the UN, and unsuccessful third-party exploration results.
Ireland’s Atlantic oil plays still represent significant potential, estimated in multi-billion barrels, though similar but more far flung frontiers – in West Africa, South America, and offshore Canada – are seeing more tangible progress with active campaigns and new discoveries.