TIDMEOG
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas
12 April 2019
Europa Oil & Gas (Holdings) plc ("Europa" or "the Company")
Interim Results
Europa Oil & Gas (Holdings) plc, the AIM traded Ireland and UK focused oil and
gas exploration, development and production company, announces its interim
results for the six month period ended 31 January 2019.
Operational highlights
* Ongoing negotiations regarding farm-in agreements to three Irish licences
(LO 16/20, FEL 1/17 and FEL 3/13) with a major international oil company:
+ expect Europa to be fully carried on a well on each licence
+ expect Europa to retain a material interest in each licence
+ the Board is confident of concluding the farm-ins in the coming months
however, there can be no guarantee that the current negotiations will
lead to completed agreements
+ final investment decision awaited from the major's head office
* Site surveys for wells at Inishkea, Kiely East and Edgeworth - targeting
summer 2019, are under application subject to regulatory approval
* Successfully executing strategy to manage the decline in production at
onshore UK fields
+ workover of the WF6 well at West Firsby utilising a drain hole jetting
technique - WF6 is currently producing 6 boepd net to Europa having
previously produced zero oil
+ 90 boepd produced in H1 2019 (H1 2018 97 boepd)
* Final phase of discussions with the National Office of Hydrocarbons and
Mines ("ONHYM"), in respect of securing a petroleum agreement in Morocco
Financial performance
* Revenue GBP0.9 million (H1 2018: GBP0.8 million)
* Pre-tax loss of GBP0.4 million, (H1 2018: pre-tax tax loss of GBP0.5 million)
* Net cash used in operating activities GBP0.3 million (H1 2018: cash from
operating activities GBP16k)
* Cash balance at 31 January 2019: GBP4.4 million (31 July 2018: GBP1.8 million)
* Successfully raised GBP4.3 million (before expenses) from existing and new
shareholders including BGF Investment Management Limited, a wholly owned
subsidiary of the Business Growth Fund ("BGF")
+ approximately 33% of the shares in the Company now owned by
institutions,
+ a further 9.5% are held by the Board
Post reporting period events
* Wressle planning appeal submitted to Planning Inspectorate on 5 February
2019 and draft bespoke programme issued by the Inspectorate on 13 February
* Gross un-risked prospective resources at the Inishkea gas prospect in LO 16
/20 confirmed as 1.5 tcf with one in three chance of success (RNS 26
February 2019)
* Transferred operatorship of PEDL143 to UK Oil & Gas PLC as announced on 14
March 2019
Europa's CEO, Hugh Mackay, said: "The last six months have been a highly active
period for Europa, not just in terms of the progress we are making to advance
our industry-leading licence position offshore Ireland, which to date has
estimated gross prospective resources of 6.4 billion barrels of oil and 1.5 tcf
of gas and where negotiations are ongoing for a farm-in for three licences with
a major international oil and gas company. In addition, we completed a GBP4.3
million fund raising, which increased the institutional representation on our
shareholder register to over one third. We also restored production at the WF6
well at West Firsby and moved closer towards landing a high impact new venture
in Morocco.
"The momentum behind the Company has continued post period end with the
completion of a major piece of exploration work at our flagship Inishkea gas
project. I look forward to providing further updates on our progress during the
second half, a period which will see the resumption of drilling activity in the
South Porcupine Basin at CNOOC International's Iolar prospect. Success here
would be a value trigger event for Europa, as it would significantly de-risk
our drill-ready prospects in the basin, specifically, the 280mmboe Kiely East
and 225mmboe Edgeworth targets."
For further information please visit www.europaoil.com or contact:
Hugh Mackay / 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 / Susie St Brides Partners Ltd +44 (0) 20 7236 1177
Geliher
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Chairman's Statement
Our objective is to create a significant liquidity event for our shareholders
through successful drilling of our high impact exploration portfolio in
Atlantic Ireland. I am pleased to report that the six months under review has
seen us take significant steps towards presenting our shareholders with a
series of potential liquidity events. On 20 November 2018, we announced that
we were negotiating farm-in agreements with a major international oil and gas
company in respect of Licensing Option ('LO') 16/20 in the Slyne Basin and
Frontier Exploration Licences ('FEL') 1/17 and 3/13 in the South Porcupine
Basin. We continue to have positive engagement with the potential farminee
and remain confident of the completion of these agreements or similar ones with
other potential farminees who are active in our virtual and physical data
rooms. We believe that the political environment in Ireland, in particular the
Climate Emergency Measures Bill, may be causing potential investors, including
farminees, to slow down their investment decisions.
The Climate Emergency Measures Bill (the "Bill") is a proposal to limit future
oil and gas exploration in Ireland which is progressing through the Irish
legislature. If put into law this Bill would stop the issuance of any new
licences for the exploration of fossil fuels. The Bill is opposed by the Irish
Government. We do not know if it will pass into law and should it do so when
that might be, and in what form. The impact on existing exploration licences is
also not clear.
Europa has honoured its work commitments and obligations to the Irish
Government and naturally we hope that our investment will be recognised and
honoured. Europa is an active member of the Irish Offshore Operators'
Association ("IOOA" www.iooa.ie). IOOA believes that in order to shape a
coherent, realistic, fully-costed and structured national policy and plan to
transition to a low carbon future, that a new and informed energy conversation
needs to begin. IOOA is actively engaged in this matter and further information
can be found at https://www.iooa.ie/
value-of-the-indigenous-oil-and-gas-industry-to-ireland/
Offshore Ireland
Our industry-leading licence position offshore Ireland is comprised of six
licences covering an area of 4,985 km2 and encompassing all the play types and
basins being targeted by the major operators who have already entered the
region, such as Exxon, CNOOC International, Equinor, TOTAL, Woodside and Cairn
Energy. To date, we have identified over 30 prospects across our licences
which, potentially hold combined Gross Mean Un-risked Prospective Resources
("GMUPR") of over 6.4 billion barrels of oil equivalent and 1.5 tcf of gas.
Following completion of technical work programmes, we are now focused on
securing partners with whom we can drill wells to prove up this
'company-making' prospectivity.
The volumetrics involved and the quality of the work we have undertaken have
generated considerable interest among the blue-chip operators as evidenced by
their activity in our data rooms. As mentioned earlier, we are currently
negotiating farm-in agreements with a major international oil and gas company
in respect of LO 16/20, FEL 1/17 and FEL 3/13. A final investment decision is
awaited from the major's head office. Meanwhile, we continue to run data rooms
and market the opportunities to others. We have submitted applications to the
relevant authorities for three site surveys in Atlantic Ireland for our
flagship Inishkea prospect, Kiely East and Edgeworth. Our aim is to be in a
position to drill all three prospects from 2020 onwards, subject to funding and
the regulatory approval process.
Post period end on 26 February 2019, we announced a new prospect inventory for
LO 16/20 including gross mean un-risked prospective dry gas resources of 1.5
tcf and a 1 in 3 chance of success for the Inishkea prospect. Together with a
location in a play that has been proven by the nearby Corrib gas field,
proximity to existing gas infrastructure, comparatively shallow water and lying
in a country that needs more gas, the volumetrics are the final piece in the
jigsaw which confirms Inishkea's status as Europa's flagship project.
Onshore UK
Our UK production assets in the East Midlands continue to generate a valuable
revenue stream for the Company. First half production averaged 90 boepd
generating revenue of GBP0.9 million, 12% higher than H1 2018's GBP0.8 million
thanks to higher oil prices and initiatives we undertook to manage the decline
at the West Firsby oil field. These included the successful workover of the
WF6 well where we, in conjunction with a third party, pioneered the use of a
drain hole jetting technique onshore UK. WF6 is currently producing 6 bopd net
to Europa having previously produced zero oil. Based on the technical success
of the workover we intend to evaluate additional suitable opportunities to use
this technology in other wells leading to higher oil rates than would otherwise
have been possible.
We are keen to grow our production incrementally - via workovers such as WF6,
and by bringing new discoveries on line. Wressle in North Lincolnshire, with an
initial targeted gross rate of 500 bopd, would more than double Europa's
existing net production to over 200 bopd. The planning appeal process formally
commenced post period end on 13 February 2019 and a planning inquiry date will
be announced in due course when a Planning Inspector will consider the
partners' new proposals for the development. Other proposals have previously
been recommended for approval by the Council's Planning Officer and supported
by expert third party review undertaken on behalf of the Council.
New Ventures
A Strategic Review was completed during the review period. This identified
areas and basins where the expertise of our technical team could be applied
to replicate the excellent work carried out in our offshore Ireland licences.
In line with this, over the course of the half year under review we have been
in discussions with the National Office of Hydrocarbons and Mines (ONHYM) to
secure a petroleum agreement in Morocco. These discussions are nearing
completion and we are confident we will soon be in a position to provide
further details on what we believe is an exciting opportunity to acquire
acreage which, in terms of 'company-making' potential, is similar in scale to
our offshore Ireland portfolio. We have also established a new Board Strategy
Committee, to review and approve value-accretive new venture opportunities
within our areas of interest.
Corporate
During the period, we successfully raised GBP4.3million from existing and new
shareholders. Following the fundraise, BGF are the largest shareholder in
Europa, with an equity share close to 15%. One third of the Company's shares
are now held by institutions and the Board holds a further 9.5%. This is a
significant increase in institutional representation in Europa's shareholder
register and we view this as an endorsement of our asset base, strategy to
monetise our assets, and finally the efforts of our excellent team.
Outlook
As at 31 January 2019, Europa's cash balances stood at GBP4.4 million (31 July
2018: GBP1.8 million). Our UK production, which averaged 90 boepd over the course
of the half year period, generated GBP0.9 million in revenues. In Ireland, we
have mapped combined gross mean un-risked prospective resources of 6.4 billion
barrels oil equivalent and 1.5 tcf gas across our six licences. We estimate
our Inishkea prospect, which lies close to the producing Corrib gas field, has
a 1 in 3 chance of success.
Compare all the above with our current market capitalisation and the value case
for Europa, in our view, speaks for itself. Our job is to realise the huge
potential of our asset base, while at all times managing risk. Drilling
offshore Ireland alongside heavyweight partners is how we intend to achieve
this. With favourable terms under negotiation with a major operator that could
lead to the funding of up to three high impact wells, we are confident we are
on course to offer our shareholders the series of potential liquidity events.
Simon Oddie
Chairman
11 April 2019
Operational review
Offshore Ireland: Exploration
Europa holds six licences in Atlantic Ireland which, in aggregate, cover an
area of over 4,985 km2, include six play types in three basins and contain over
30 prospects and leads that potentially hold gross mean un-risked prospective
resources of 6.4 billion barrels oil equivalent and 1.5 tcf gas.
To date six prospects have been de-risked to drill-ready status including the
Inishkea gas project in LO 16/20 in the Slyne Basin; Kiely East in FEL 2/13 and
Edgeworth in FEL 1/17 in the South Porcupine Basin. Inishkea is regarded by
Europa as its flagship project due to its location in a play that has been
proven by the Corrib gas field, its potential to be larger than Corrib, its
proximity to existing processing facilities, and Ireland's need for more gas
supplies.
Activity during the half year period has been centred on securing farm-out
partners to fund drilling activity. As announced in November 2018, Europa is
currently negotiating farm-in agreements with a major international oil and gas
company in respect of LO 16/20, FEL 1/17 and FEL 3/13. A final investment
decision from the major's head office is awaited. Subject to a positive
outcome, the terms agreed would see Europa hold material interests in up to
three wells. To ensure wells can be drilled at the earliest opportunity,
Europa has submitted applications for three site surveys in summer 2019 for the
Inishkea, Kiely East and Edgeworth prospects. Subject to successful conclusion
of this work and finalisation of funding, all three prospects could be drilled
from 2020 onwards.
Drilling activity in the region is due to recommence in summer 2019 with a well
targeting the Iolar prospect in FEL 3/18 in the Porcupine basin operated by
CNOOC International, together with its partner ExxonMobil. Exploration success
at Iolar potentially de-risks 1 billion boe in five prospects in Europa's
Porcupine portfolio including Kiely East (280 mmboe) and Edgeworth (225 mmboe).
Slyne Basin: LO 16/20
LO 16/20 is located next to the producing Corrib gas field in the Slyne Basin
and contains the Corrib North gas discovery. LO 16/20 represents low risk
exploration in a proven gas play.
During the half year, technical work was undertaken to further de-risk Inishkea
and calculate prospective resources for Inishkea. This work included Pre-Stack
Depth Migration ("PSDM") reprocessing of 770 km2 of 3D seismic data over
Inishkea and the Corrib gas field. The geophysical interpretation arising from
the PSDM data has been benchmarked and calibrated against newly released Ocean
Bottom Cable 3D seismic data over the Corrib gas field. Post period end in
February 2019, the Company announced prospective resources for Inishkea, the
details of which are provided in the table 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
Inishkea is a large fault bounded Triassic structure that lies 11km to the
northwest of the Corrib gas field. The reservoir is Triassic age 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, the Company has assigned a one in three chance of success to
Inishkea based on in-house technical work.
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), which would enable
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.
The Corrib North structure containing the 18/20-7 gas discovery well drilled by
Shell in 2010 may be upgraded to contingent resources pending further
engineering evaluation. Based on the interpretation of historic 3D and 2D
seismic, discovered Gas Initially In Place ("GIIP") is provided in the table
below:
Licence Prospect Play Gross discovered GIIP
(billion cubic feet)
Low Best High
LO 16/20 Corrib North Triassic gas 5 41 208
South Porcupine Basin: FELs 1/17, 2/13 and 3/13
Europa operates three licences in the South Porcupine Basin, FELs 1/17, 2/13
and 3/13. An aggregate of 4.3 billion barrels of oil equivalent (boe) of gross
mean un-risked prospective resources have been estimated across nine priority
prospects on these three licences based on the results of reprocessed PSDM 3D
seismic data originally acquired in 2013. These include firm drilling targets
Edgeworth in FEL 1/17, Wilde in 3/13 and Kiely East in 2/13. The table below
summarises the Gross Un-risked Prospective Resources ("GMUPR") across selected
prospects in FELs 1/17, 2/13 and 3/13 in the South Porcupine Basin:
Licence Prospect Play Gross Un-risked Prospective Resources
mmboe*
Low Best High Mean
FEL 1/17 Ervine Pre-rift 63 159 363 192
FEL 1/17 Edgeworth Pre-rift 49 156 476 225
FEL 1/17 Egerton Syn-rift 59 148 301 167
FEL 3/13 Beckett mid-Cretaceous Fan 111 758 4229 1719
FEL 3/13 Shaw+ mid-Cretaceous Fan 20 196 1726 747
FEL 3/13 Wilde Early Cretaceous Fan 45 241 1082 462
FEL 2/13 Kiely East Pre-rift 52 187 612 280
+
FEL 2/13 Kiely West Pre-rift 23 123 534 225
+
FEL 2/13 Kilroy+ Cret. Slope Apron 37 177 734 312
Total 4,329
*million barrels of oil equivalent. The hydrocarbon system is considered an oil
play and mmboe is used to take account of associated gas. However, due to the
significant uncertainties in the available geological information, there is a
possibility of gas charge.
+ on block
Following the completion of the PSDM programme and release of the new prospect
inventory, Europa opened a virtual data room for prospective farminees for its
three operated South Porcupine licences in July 2018. As mentioned previously,
Europa is negotiating with a major international oil and gas company in respect
of FEL 1/17 and FEL 3/13.
The 2019 CNOOC International well in FEL 3/18 will drill the Iolar prospect,
which the Company understands is a pre-rift play. Europa has five pre-rift
prospects in FEL 2/13 and FEL 1/17 with combined GMUPR of just over 1 billion
boe. If Iolar is successful there may be positive technical and commercial read
across resulting in a de-risking of Europa's prospects.
South Porcupine Basin: LO 16/19
LO 16/19 is located on the west side of the South Porcupine basin. A farm-out
agreement for LO 16/19 was secured with Cairn Energy in April 2017, as a result
of which Cairn was assigned operatorship of and acquired a 70% interest in the
licence in exchange for funding a work programme worth up to US$6 million.
This included the acquisition of 3D seismic in 2017. The final processed
dataset was delivered in Q4 2018 and a prospect inventory based on this is
expected to be published in 2019.
Padraig Basin: LO 16/22
LO16/22 is located in the Padraig Basin on the eastern margin of the Rockall
Trough. Padraig is a remnant Jurassic basin. Based on Europa's restoration of
the conjugate margin prior to the spreading of the Atlantic seafloor, the most
relevant analogue is the conjugate margin play offshore Newfoundland in the
Flemish Pass basin and which hosts the 300 million barrel Bay du Nord oil
discovery.
Structures of significant size have been mapped on 2D seismic acquired in 1998,
along with multiple leads in Triassic gas, pre-rift and syn-rift hydrocarbon
plays. Gross mean un-risked indicative resources are estimated to be
approximately 500 million boe for the syn-rift oil play and potentially 5tcf of
GIIP in the Triassic gas play. Work is underway to mature the leads, which lie
in water depths ranging from 800m to 2,000m, to prospect status.
UK - Onshore Production
East Midlands: West Firsby; Crosby Warren; Whisby-4
Europa produces from three oilfields in the East Midlands: West Firsby (100%
working interest); Crosby Warren (100%); and the Whisby-4 well (65%). During
the six months to 31 January 2019, an aggregate 90 boepd were recovered from
the three fields (H1 2018: 97 boepd) with all the oil transported by road to
the Immingham refinery.
During the period, initiatives were undertaken to manage the decline at the
West Firsby oil field including a workover of the WF6 well utilising a drain
hole jetting technique for the first-time onshore UK. The workover involved
jetting sixteen 90m length drain holes. Having previously produced zero oil,
WF6 is currently producing 6 bopd net to Europa.
UK - Development
East Midlands: PEDL180 (Wressle); PEDL182 (Broughton North)
The Wressle conventional oil field on PEDL180 was discovered by the Wressle-1
well in 2014. During production testing in 2015, Wressle-1 flowed oil and gas
at a combined flowrate of 710 boepd from three separate reservoirs: the Ashover
Grit, the Wingfield Flags and the Penistone Flags. In September 2016, a
Competent Person's Report provided independent estimates of Reserves and
Contingent and Prospective oil and gas resources for the Wressle discovery of
2.15 million stock tank barrels classified as discovered (2P+2C). Reservoir
engineering analyses indicate an initial production flow rate of 500 bopd gross
from the Ashover Grit interval at Wressle. At this rate, Europa's existing
production would be over 200 bopd and would generate significant cash flows for
the Company.
Following the Planning Inspectorate's decision to reject an appeal by the
partnership against North Lincolnshire Council Planning Committee's decision to
refuse planning permission for the Wressle oil development in January 2018, the
operator Egdon Resources submitted a new planning application for the
development of Wressle in July 2018. Despite being recommended for approval by
North Lincolnshire Council's planning officers, the application was rejected by
the Council's Planning Committee in November 2018.
In January 2019, an application to extend the existing planning consent for the
Wressle site by a year, was approved by the Planning Inspector on appeal after
the original application for an extension was refused by North Lincolnshire
Council's Planning Committee in August 2018. This was despite having been
recommended for approval by the Council's Planning Officer. The extension to
the existing planning consent to 24 January 2020 is expected to allow
sufficient time for the Planning Inspector to determine an appeal against the
Council's rejection of the Wressle development application. Following this,
post period end, the operator submitted the relevant appeal documentation. A
draft bespoke timetable for the appeal process, which will involve a planning
inquiry, was issued on 13 February by the Planning Inspectorate.
Europa has a 30% working interest in licence PEDL180 in the East Midlands which
holds the Wressle oil discovery, alongside Egdon (operator, 30%), Union Jack
Oil (27.5%), and Humber Oil & Gas Limited (12.5%).
The Broughton North exploration prospect on PEDL182 lies adjacent and north of
PEDL180. In 1984, a well drilled by BP discovered oil at Broughton. In the
CPR, Broughton North was assigned gross mean un-risked prospective resources of
0.6 million boe and a geological chance of success of 50%.
UK - Exploration
Weald Basin: PEDL143 (Holmwood)
In September 2018, the Secretary of State for the Environment, Food and Rural
Affairs, refused an application to extend the site lease. Acting on behalf of
the partnership, Europa withdrew its application to extend planning permission
to drill the Holmwood exploration well from the Bury Hill Wood site, which has
since been re-instated. The remaining prospectivity of PEDL143 is now being
evaluated which, in addition to the established Portland sandstone reservoirs,
includes the Kimmeridge Limestone, an emerging play in the Weald Basin. On 14
March Europa announced that it was in the process of transferring operatorship
to UK Oil & Gas PLC. Regulatory consent has been obtained.
East Midlands: PEDL299 (Hardstoft)
PEDL299 contains the Hardstoft oil field which was discovered in 1919 by the
UK's first ever exploration well. Hardstoft produced 26,000 barrels of oil
from Carboniferous limestone reservoirs in the 1920s. Gross 2C contingent
resources of 3.1 million boe and gross 3C contingent resources of 18.5 million
boe in the Hardstoft structure were identified in a CPR issued by joint venture
partner Upland Resources. The application of modern production testing and
drilling methodologies could lead to commercial oil flowrates being achieved.
Europa's interest in PEDL299, which is restricted to the conventional
prospectivity including Hardstoft, is 25%, alongside Upland 25% and INEOS, the
operator, 50%.
Cleveland Basin: PEDL343 (Cloughton)
PEDL343 contains the Cloughton gas discovery, which was successfully drilled by
Bow Valley in 1986 and flowed a small amount of gas to surface on production
test from conventional Carboniferous sandstone reservoirs. Europa regards
Cloughton as a gas appraisal opportunity with the critical challenge being to
obtain commercial flowrates from future production testing operations. Europa
holds a 35% interest in PEDL343 alongside Arenite 15%, Third Energy 20%
(operator), Egdon Resources 17.5% and Petrichor Energy 12.5%.
East Midlands: PEDL181
PEDL181 is exposed to the hydrocarbon potential of the Humber basin. The
licence has technical synergy with the adjacent PEDL334 which was awarded to an
Egdon Resources-led group in the 14th Round for the purpose of conventional and
unconventional exploration.
New Ventures
As announced in January 2019, Europa is in the final phase of discussions with
The National Office of Hydrocarbons and Mines ('ONHYM') regarding securing a
petroleum agreement in Morocco. The Company continues to evaluate new ventures
within its established areas of interest which include greenfield exploration
and brownfield re-development projects in North Africa, Western Europe, and
Central Europe.
Financials
Average daily H1 2019 production was 90 boepd compared to 97 boepd in H1 2018
following:
* Natural decline at three production sites
* Incremental production added from the West Firsby 6 workover starting in
January 2019 which is currently producing 6 bopd net to Europa
There was a 14% increase in average realised oil price to US$67.7 per barrel
(H1 2018: US$59.2). Foreign exchange movements positively impacted revenues by
5% as US Dollar sales converted to Sterling at US$1.29 (H1 2018: US$1.35)
Conclusion and Outlook
Our objective is to drill-up our portfolio of high impact prospects in Atlantic
Ireland at the earliest opportunity. Several workstreams are being advanced
concurrently to ensure we are in a position to achieve this, including securing
partners for our South Porcupine and Slyne Basin licences, and undertaking site
surveys in summer 2019 for our drill-ready prospects Inishkea in the Slyne
Basin, and Kiely East and Edgeworth in the South Porcupine Basin. Much
progress has been made. Notably with an offer received from the NW European
division of a major international oil and gas company to farm-in to three
licences. Subject to final negotiation and an investment decision awaited from
the major's head office, Europa will be funded for up to three high impact
wells including one targeting 1.5 tcf of gas at Inishkea next to the Corrib
field. Furthermore, this is not all high-risk wildcat exploration. We rank
Inishkea as having a one in three chance of success. We also note that other
companies are active in the South Porcupine: CNOOC International intend to
drill the Iolar prospect in summer 2019 and ENI have applied for consent to
acquire a site survey on Dunquin South in summer 2019. These are exciting times
for Atlantic Ireland.
Outside Ireland, we will continue to support the operator's efforts to gain
approval to develop the Wressle oil field. If successful, Wressle will more
than double our existing production to over 200 bopd which, at current oil
prices, would generate a valuable revenue stream for the Company. Elsewhere we
are close to finalising a petroleum agreement in Morocco in line with our
strategy to diversify our portfolio, and where we can deploy the same technical
skillset and expertise..
Hugh Mackay
CEO
11 April 2019
Qualified Person Review
This release has been reviewed by Hugh Mackay, Chief Executive of Europa, who
is a petroleum geologist with over 30 years' experience in petroleum
exploration and a member of the Petroleum Exploration Society of Great Britain,
American Association of Petroleum Geologists and Fellow of the Geological
Society. Mr Mackay has consented to the inclusion of the technical information
in this release in the form and context in which it appears.
Licence Interests Table
Country Area Licence Field/ Operator Equity Status
Prospect
UK East DL003 West Firsby Europa 100% Production
Midlands
DL001 Crosby Warren Europa 100% Production
PL199/215 Whisby-4 BPEL 65% Production
PEDL180 Wressle Egdon 30% Development
PEDL181 Europa 50% Exploration
PEDL182 North Egdon 30% Exploration
Broughton
PEDL299 Hardstoft INEOS 25% Exploration
PEDL343 Cloughton Third 35% Exploration
Energy
Weald PEDL143 Holmwood UKOG 20% Exploration
FEL 2/13 Doyle: Aw/Ac/ Europa 100% Exploration
South Ae/B/C,
Porcupine Kilroy, Keane,
Kiely East,
Ireland Kiely West ,
Lead F
FEL 3/13 Beckett, Wilde Europa 100% Exploration
Shaw
FEL 1/17 Ervine, Europa 100% Exploration
Edgeworth,
Egerton,PR3
LO 16/19 2 leads Cairn 30% Exploration
Slyne LO 16/20 Corrib North Europa 100% Exploration
discovery,
Inishkea
Padraig LO 16/22 6 leads Europa 100% Exploration
Financials
Unaudited consolidated statement of comprehensive income
6 months to 6 months to Year to
31 January 31 January 31 July 2018
2019 2018 (audited)
GBP000 GBP000 GBP000
Revenue 859 778 1,634
Cost of sales (855) (670) (1,365)
Impairment of producing fields - - (142)
Exploration write-off - (46) (1,289)
------ ------ ------
Gross profit 4 62 (1,162)
Administrative expenses (375) (429) (967)
Finance income 27 6 10
Finance expense (93) (136) (171)
------ ------ ------
Loss before taxation (437) (497) (2,290)
Taxation credit/(charge) - 168 (341)
------ ------ ------
Total comprehensive loss for the period (437)
attributed to the equity shareholders of (329) (2,631)
the parent
====== ====== ======
Pence per Pence per Pence per
share share share
Earnings per share (EPS) attributable
to the equity shareholders of the parent
Attributable to the equity shareholders of
the
Basic and diluted EPS (note 4) (0.13)p (0.11)p (0.87)p
Unaudited consolidated statement of financial position
31 January 31 January 31 July
2019 2018 2018
(audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Intangible assets 6,759 6,534 5,959
Property, plant and equipment 621 813 668
Deferred tax asset - 508 -
------ ------ ------
Total non-current assets 7,380 7,855 6,627
------ ------ ------
Current assets
Inventories 26 19 20
Trade and other receivables 300 512 471
Cash and cash equivalents 4,435 2,306 1,771
------ ------ ------
4,761 2,837 2,262
------ ------ ------
Total assets 12,141 10,692 8,889
====== ====== ======
Liabilities
Current liabilities
Trade and other payables (918) (883) (1,299)
------ ------ ------
Total current liabilities (918) (883) (1,299)
------ ------ ------
Non-current liabilities
Long-term provisions (2,826) (2,652) (2,735)
------ ------ ------
Total non-current liabilities (2,826) (2,652) (2,735)
------ ------ ------
Total liabilities (3,744) (3,535) (4,034)
------ ------ ------
Net assets 8,397 7,157 4,855
====== ====== ======
Capital and reserves attributable to equity
holders of the parent
Share capital (note 3) 4,447 3,014 3,014
Share premium 21,009 18,481 18,481
Merger reserve 2,868 2,868 2,868
Retained deficit (19,927) (17,206) (19,508)
------ ------ ------
Total equity 8,397 7,157 4,855
====== ====== ======
Unaudited consolidated statement of changes in equity
Share Share Merger Retained Total
capital premium reserve deficit equity
GBP000 GBP000 GBP000 GBP000 GBP000
Unaudited
Balance at 1 August 2017 3,014 18,481 2,868 (16,888) 7,475
Total comprehensive loss - - - (329) (329)
for the period
Share based payments - - - 11 11
------ ------ ------ ------ ------
Balance at 31 January 3,014 18,481 2,868 (17,206) 7,157
2018
====== ====== ====== ====== ======
Audited
Balance at 1 August 2017 3,014 18,481 2,868 (16,888) 7,475
Loss for the year - - - (2,631) (2,631)
attributable to the
equity shareholders of
the parent
Share based payments - - - 11 11
------ ------ ------ ------
------
Balance at 31 July 2018 3,014 18,481 2,868 (19,508) 4,855
====== ====== ====== ====== ======
Unaudited
Balance at 1 August 2018 3,014 18,481 2,868 (19,508) 4,855
Total comprehensive loss - - - (437) (437)
for the period
Issue of share capital 1,433 2,546 - - 3,979
Issue of share options - (18) - 18 -
Share based payments - - - - -
------ ------ ------ ------ ------
Balance at 31 January 4,447 21,009 2,868 (19,927) 8,397
2019
====== ====== ====== ====== ======
Unaudited consolidated statement of cash flows
6 months to 6 months to Year to
31 January 31 January 31 July 2018
2019 2018 (audited)
GBP000 GBP000 GBP000
Cash flows (used in)/from operating activities
Loss after taxation (437) (329) (2,631)
Adjustments for:
Share based payments - 11 11
Depreciation 47 69 72
Impairment of producing field - - 142
Exploration write-off - 46 1,289
Finance income (27) (6) (10)
Finance expense 93 136 171
Taxation charge/(credit) - (168) 341
Decrease in trade and other receivables 22 101 69
Increase in inventories (6) (5) (6)
(Decrease)/increase in trade and other (35) 161 73
payables
------ ------ ------
Net cash (used in)/from operating activities (343) 16 (479)
====== ====== ======
Cash flows used in investing activities
Purchase of intangibles (1,002) (1,081) (1,336)
Buy back of part interest in licence - (160) -
Interest received 5 6 10
------ ------ ------
Net cash used in investing activities (997) (1,235) (1,326)
====== ====== ======
Cash flows from/(used in) financing activities
Proceeds from the issue of share capital 3,961 - -
Increase/(decrease) in payables relating to 14 (16) (16)
share capital issue costs
Option based equity movement on share issue 18 - -
Finance costs (2) (2) (3)
------ ------ ------
Net cash from/(used in) financing activities 3,991 (18) (19)
====== ====== ======
Net increase/(decrease) in cash and cash 2,651 (1,237) (1,824)
equivalents
Exchange gain/ (loss) on cash and cash 13 (48) 4
equivalents
Cash and cash equivalents at beginning of 1,771 3,591 3,591
period
------ ------ ------
Cash and cash equivalents at end of period 4,435 2,306 1,771
====== ====== ======
Notes to the consolidated interim statement
1 Nature of operations and general information
Europa Oil & Gas (Holdings) plc ("Europa Oil & Gas") and subsidiaries' ("the
Group") principal activities consist of investment in oil and gas exploration,
development and production.
Europa Oil & Gas is the Group's ultimate parent Company. It is incorporated and
domiciled in England and Wales. The address of Europa Oil & Gas's registered
office head office is 6 Porter Street, London W1U 6DD. Europa Oil & Gas's
shares are listed on the London Stock Exchange AIM market.
The Group's consolidated interim financial information is presented in Pounds
Sterling (GBP), which is also the functional currency of the parent Company.
The consolidated interim financial information has been approved for issue by
the Board of Directors on 11 April 2019.
The consolidated interim financial information for the period 1 August 2018 to
31 January 2019 is unaudited. In the opinion of the Directors the condensed
interim financial information for the period presents fairly the financial
position, and results from operations and cash flows for the period in
conformity with the generally accepted accounting principles consistently
applied. The condensed interim financial information incorporates unaudited
comparative figures for the interim period 1 August 2017 to 31 January 2018 and
the audited financial year to 31 July 2018.
The financial information contained in this interim report does not constitute
statutory accounts as defined by section 435 of the Companies Act 2006. The
report should be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 July 2018.
The comparatives for the full year ended 31 July 2018 are not the Company's
full statutory accounts for that year. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified and did not contain a statement under
section 498 (2) - (3) of the Companies Act 2006.
Given the current cash balance and cash inflow from the Group's producing
assets, the Directors have concluded, at the time of approving the consolidated
interim financial information, that there is a reasonable expectation, based on
the Group's cash flow forecasts, that the Group can continue in operational
existence for the foreseeable future, which is deemed to be at least 12 months
from the date of signing the consolidated financial information. Accordingly,
they continue to adopt the going concern basis in preparing the consolidated
interim financial information.
2 Summary of significant accounting policies
The condensed interim financial information has been prepared using policies
based on International Financial Reporting Standards (IFRS and IFRIC
interpretations) issued by the International Accounting Standards Board
("IASB") as adopted for use in the EU. The condensed interim financial
information has been prepared using the accounting policies which will be
applied in the Group's statutory financial information for the year ended 31
July 2019.
This results in the adoption of various standards and interpretations, none of
which have had a material impact on the interim report or are expected to have
a material impact on the financial statements for the full year.
3 Share capital
6 months to 31 6 months to Year to
January 2019 31 January 31 July 2018
2018 (audited)
Allotted, called up and fully paid ordinary Shares Shares Shares
shares of 1p
Start of period 301,388,379 301,388,379 301,388,379
Issued in the period 143,303,220 - -
---------------- -------------- --------------
End of period 444,691,599 301,388,379 301,388,379
========== ========= =========
GBP000 GBP000 GBP000
Start of period 3,014 3,014 3,014
Issued in the period 1,433 - -
------ ------ ------
End of period 4,447 3,014 3,014
====== ====== =======
Ordinary shares issued Raised Nominal value
On 10 December 2018 at 6p issue price Number net of costs GBP000
of shares GBP000
Placing 133,333,338 3,684 1,333
Open offer 9,969,882 277 100
------ ------ ------
143,303,220 3,961 1,433
====== ====== ======
4 Earnings per share (EPS)
Basic EPS has been calculated on the loss after taxation divided by the
weighted average number of shares in issue during the period. Diluted EPS uses
an average number of shares adjusted to allow for the issue of shares, on the
assumed conversion of all in-the-money options.
The Company's average share price for the period was 3.51p which was below the
exercise price of all 25,637,898 outstanding share options (H1 2018: 5.74p
which was below the exercise price of all 25,164,440 outstanding share
options).
The calculation of the basic and diluted earnings per share is based on the
following:
6 months to 6 months to Year to
31 January 31 January 31 July 2018
2019 2018 (audited)
GBP000 GBP000 GBP000
Losses
Loss for the period attributable to the (437) (329) (2,631)
equity shareholders of the parent
====== ====== ======
Number of shares
Weighted average number of ordinary shares 342,665,937 301,388,379 301,388,379
for the purposes of basic and diluted EPS
====== ====== ======
5 Taxation
Consistent with the year-end treatment, current and deferred tax assets and
liabilities have been calculated at tax rates which were expected to apply to
their respective period of realisation at the period end.
6 Post reporting date
* Wressle planning appeal submitted to Planning Inspectorate on 5 February
2019 and draft bespoke programme issued by the Inspectorate on 13 February
* Gross un-risked prospective resources at the Inishkea gas prospect in LO 16
/20 confirmed as 1.5 tcf with one in three chance of success (RNS 26
February 2019)
* Transferred operatorship of PEDL143 to UK Oil & Gas PLC as announced on14
March 2019
END
(END) Dow Jones Newswires
April 12, 2019 02:00 ET (06:00 GMT)
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