Europa Oil & Gas (Holdings) PLC (AIM:EOG) chairman Brian O'Cathain said the Serenity field in the North Sea is a “highly exciting asset with the potential to deliver significant near-term value”.
O'Cathain, in a statement ahead of today’s shareholders’ general meeting, highlighted the opportunity as the company seeks shareholder approval for its £7.02mln equity raise to fund Europa’s participation in Serenity - it would see 390mln new shares issued at 1.8p each.
Serenity is operated by i3 Energy and earlier this month Europa agreed a deal to acquire a 25% stake in the project, in return for funding 46.25% of the cost of an appraisal well (capped at US$15mln).
“An appraisal well is scheduled to be drilled in the late summer this year, and should it be successful, it will add material value to existing shareholders as it will de-risk a large volume of hydrocarbons located close to existing infrastructure,” O’Cathain said.
“This acquisition allows Europa to deliver on its promise to diversity its portfolio by adding an appraisal asset and strengthen Europa's existing producing and high impact exploration assets.”
“To this end, the board and I firmly believe that the opportunity to acquire the stake in Serenity is ideal, not just from a growth perspective but also from a strategic perspective as it complements our existing asset base.”
He added: “With drilling set to start in the late summer, we regard Serenity to be a highly exciting asset with the potential to deliver significant near-term value to our shareholders and could provide sufficient recoverable volumes for a standalone development.
“The well planning for the appraisal well has already been completed by i3 Energy, which has extensive regional subsurface knowledge and operational experience, and is thus an excellent partner and operator to deliver on Serenity's potential.”