Europa Oil & Gas (Holdings) Plc (LON:EOG) boss Simon Oddie told investors that the pending start-up of the Wressle field will transform the company’s production and revenue profile.
“Together with measures we have taken to reduce our already low cost base and, following the repositioning of our portfolio towards gas, we believe Europa will be well placed to withstand a sustained period of oil price volatility and weakness,” Oddie, Europa’s chairman and interim chief executive said in a statement accompanying the oiler's interim results.
Oddie described the granting of planning permission at Wressle as the “standout” event during the six-period under review, along with the award of the Inezgane permit offshore Morocco.
The company, meanwhile, updated investors on measures put in place to protect the business during the coronavirus (COVID-19) crisis.
READ: Europa launches review and cost cutting amid coronavirus
In the UKm the company noted that all directors, London-based staff and consultants have been working from home since March 16, and have agreed to a temporary 20% pay cut since April 1, with operations continuing at all three of the group’s production sites.
Significantly, recently, a new assessment of the Wressle field confirmed the asset as “robust” in the current economic environment, with the necessary break-even oil price estimated at US$17.62 per barrel.
Elsewhere, the company retains ambitions to progress new farm-outs for its high-impact projects, in Ireland and Morocco.
“While the ongoing COVID-19 pandemic may impact activity on the ground, there is much we are still able to get on with, notably working towards the farm-out of our strategic position in the Slyne Basin and continuing desktop work and launching the farm-out of our licence offshore Morocco,” Oddie said.
“With gas set to play a key role in Ireland’s energy mix and our licences located in a gas play proven by the producing Corrib field, Inishkea represents a compelling investment opportunity with an attractive risk/reward profile.
“While offshore Morocco is at an earlier stage, we are already talking to a number of parties who expressed an interest in our Inezgane licence, even before we had identified multiple targets with up to 250mmbls of prospective resources.”
Oddie said the group “will continue to follow the latest government advice and as a result, timescales for certain activities and milestones, including our efforts to add a third leg to our business by securing a late-stage appraisal project, may well need to be lengthened."
“Importantly," he added, "the roadmap we have to increase our onshore UK production and to expose our shareholders to potentially value-creating events offshore Ireland and Morocco remains in place.”
In terms of financial results, the company reported £800,000 of revenue for the six months ended January 31, 2020. Net cash used in operations was reported at £400,000 and it reported a £3.5mln loss for the period, including write-offs for relinquished exploration acreage in Ireland.
Europa O&G ended January with £1.5mln of cash.