Europa Oil & Gas (Holdings) plc /
Index: AIM / Epic: EOG / Sector: Oil & Gas
26 February 2019
Europa Oil &
Gas (Holdings) plc (‘Europa’ or ‘the Company’)
New Prospect
Inventory for LO 16/20, Offshore Ireland
Europa Oil & Gas (Holdings) plc, the UK and Ireland focused oil and gas exploration,
development and production company, is pleased to announce a new
prospect inventory for Licensing Option (‘LO’) 16/20 in the Slyne
basin in Atlantic Ireland. LO16/20 includes the Company’s flagship
Inishkea prospect which lies immediately to the north west of, and
abuts, the producing Corrib gas field in the Corrib Field Petroleum
Lease Area.
Highlights:
- Inishkea gross mean un-risked prospective gas resources of 1.5
trillion cubic feet (‘TCF’)
- Chance of success estimated as 1 in 3
- Site survey planned for summer 2019, targeting a well, subject
to funding and regulatory consent, in 2020
- Farm-in negotiations ongoing with a major oil and gas company
in respect of three of Europa’s offshore Ireland licences, including LO 16/20 which
holds Inishkea
Europa's CEO, Hugh Mackay,
said: “Our very detailed and thorough technical work confirms
Inishkea to be a large, robust, low risk, gas prospect. The early
promise we identified has been validated and the prospect has now
been de-risked significantly. Inishkea’s location in a proven play,
and close proximity to the nearby Corrib gas field and facilities
informed our decision to elevate the prospect to flagship status.
With 1.5 TCF of gross mean un-risked prospective gas resources, and
a 33% chance of success, the prospect has exceeded our
expectations.
“We will press on with our operational planning to enable a site
survey in summer 2019 and a well targeting Inishkea, subject to
funding and regulatory consent, in 2020. Since opening the farmout
dataroom in December 2018 we have had
several large oil companies review the prospect and we are updating
them with this new information. Separately, our ongoing farm-in
negotiations with a major international oil and gas company for
three of our licences, FEL 1/17, FEL 3/13, and LO 16/20 which holds
Inishkea are progressing. Subject to successful completion, Europa
will have a clear line of sight to the drilling of a series of
wells offshore Ireland, each of
which has company-making potential.”
Further Information
Europa has completed Pre-Stack Depth Migration (‘PSDM’)
reprocessing of 770km2 of 3D seismic data over the
Inishkea prospect, including the area of the Corrib gas field. In
addition, Europa has purchased 1,544 km2 of released 3D
seismic data shot over, and immediately adjacent to, the LO area,
5,000 km of regional 2D and 13 wells. Europa has further purchased
Ocean Bottom Cable 3D seismic data over the Corrib gas field and
used it to successfully benchmark and calibrate the PSDM data and
the resulting geophysical interpretation and mapping. The Corrib
gas field is interpreted as a salt-cored anticline in the Triassic
Corrib Sandstone Formation (formerly the Sherwood Sandstone). The
gas is dry, believed to be sourced from the underlying
Carboniferous. Recoverable Reserves for Corrib are approximately 1
TCF.
Inishkea prospective resources are tabulated below.
Licence |
Prospect |
Play |
Gross un-risked prospective resources (billion cubic
feet) |
Low |
Best |
High |
Mean |
LO 16/20 |
Inishkea |
Triassic gas |
244 |
968 |
3,606 |
1,528 |
Europa follows Society of Petroleum Engineers (SPE) guidelines
for petroleum reserves and resources classification. By definition
prospective resources are recoverable and should not be confused
with undiscovered gas initially in place (‘GIIP’), which are not.
Further information can be found on the SPE website
https://bit.ly/2LtLVIa .
Inishkea is a large fault bounded Triassic structure. It lies to
the northwest of the Corrib gas field and is 11 km from Corrib at
its nearest point. The reservoir is Triassic age Corrib sandstone
sourced from the underlying Carboniferous. The trap is provided by
a combination of Triassic Uilleann Halite top seal and fault seal.
Engineering studies demonstrate strong positive economics for a
range of porosity outcomes, including outcomes significantly poorer
than Corrib. Europa’s view of porosity at Inishkea is supported by
velocity data from new PSDM data. Given the Company’s confidence in
trap and reservoir quality and the nearby producing Corrib gas
field, prospect risk is regarded as low based on in-house technical
work. A slidepack on the Inishkea prospect can be found on Europa’s
website (https://bit.ly/2SYy3wJ).
There are five other Triassic and Jurassic leads on LO16/20.
These are not included in the prospect inventory at this moment but
may be upgraded to prospect status in the future. The Corrib North
structure containing the 18/20-7 gas discovery well drilled by
Shell in 2010 is included in the prospect inventory and may be
upgraded to contingent resources pending further engineering
evaluation.
A gas discovery at Inishkea has the potential for fast track
development utilising the nearby Corrib gas field facilities. The
Corrib field is in decline and growing ullage in the gas
infrastructure is predicted to become available. A recent
report authored by PwC for the Irish Offshore Operators’
Association – available here
https://www.iooa.ie/value-of-the-indigenous-oil-and-gas-industry-to-ireland/ -
references rising demand for electricity in Ireland over the next 10 years, with a
projected potential increase of up to 57%. The PwC report also
cites rising demand for gas, which is forecast to increase 35% by
2030. Inishkea gas has the potential to provide a vital component
of Ireland’s energy mix providing energy security, investment, jobs
and tax revenues.
A drilling location for a first exploration well on Inishkea
(18/20-H) has been identified. There is a robust, low risk tie on
seismic data for the Corrib Sandstone reservoir back to the Corrib
gas field. Europa intends to acquire a site survey in summer 2019
(subject to regulatory consent), enabling a well to be drilled at
this location in 2020 (subject to funding and regulatory consents).
Operations planning for both the site survey and engineering design
of the exploration is in progress.
As previously announced, the Company is currently negotiating
farm-in agreements with a major international oil and gas company
(‘the Major’) in respect of LO 16/20, FEL 1/17 and FEL 3/13. The
Company has agreed terms with the Major’s NW Europe division and is awaiting a final
investment decision from their head office. Europa continues to
have positive engagement with the Major and continues to have
positive interest from other potential farminees. Further
announcements will be made in due course.
Further information regarding Europa’s complete Atlantic Ireland
prospect inventory can be found on its website
(https://bit.ly/2GNQAFI).
The information communicated in this
announcement contains inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
* * ENDS * *
For further information please visit www.europaoil.com or
contact:
Hugh Mackay |
Europa |
+ 44 (0) 20 7224 3770 |
Phil Greenhalgh |
Europa |
+ 44 (0) 20 7224 3770 |
Matt Goode |
finnCap Ltd |
+ 44 (0) 20 7220 0500 |
Simon Hicks |
finnCap Ltd |
+ 44 (0) 20 7220 0500 |
Camille Gochez |
finnCap Ltd |
+ 44 (0) 20 7220 0500 |
Frank Buhagiar |
St Brides Partners Ltd |
+ 44 (0) 20 7236 1177 |
Susie Geliher |
St Brides Partners Ltd |
+ 44 (0) 20 7236 1177 |
Notes
Europa Oil & Gas (Holdings) plc has a diversified portfolio
of multi-stage hydrocarbon assets that includes production,
exploration and development interests, in countries that are
politically stable, have transparent licensing processes, and offer
attractive terms. In 2018 Europa produced 94 boepd. Its highly
prospective exploration projects include the Wressle development in
the UK (targeting production start-up in 2019 at 500 bopd gross)
and six licences offshore Ireland
with the potential to host gross mean un-risked prospective
resources of 6.4 billion barrels oil equivalent and 1.5 tcf gas
across all six licences.