REG-Europa Oil & Gas (Holdings) PLC: Farm-Out of Holmwood, Weald Basin <Origin Href="QuoteRef">EOG.L</Origin>

Europa Oil & Gas (Holdings)Announcement

23/05/2016 07:05

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas 
 
 23 May 2016 
 
 Europa Oil & Gas (Holdings) plc (‘Europa’ or ‘the Company’) 
 
  Farm-Out of Holmwood, Weald Basin          
 
 Europa Oil & Gas (Holdings) plc, the AIM listed oil and gas exploration,
development and production company focused on Europe, is pleased to announce
it has signed a Farm-Out Agreement (`FOA') in relation to its 40% interest in
the PEDL143 licence in the Weald Basin with Union Jack Oil and Gas plc
(‘UJO’).  PEDL143 contains the conventional Holmwood prospect
(‘Holmwood’) which has estimated gross mean unrisked prospective resources
of 5.6 mmbo in Portlandian and Corallian sandstones and a P90 – P10 range of
resources of 1 to 11 mmbo.  Planning permission is in place for a deviated
exploration well to be drilled at Holmwood and drilling operations are
anticipated to commence in late 2016 / H1 2017. 
 
 * Under the terms of the FOA: 
 * UJO will acquire a 7.5% working interest in PEDL143 from Europa 
 * UJO will pay 15%, and Europa 25% of the costs to drill an exploration well
at Holmwood up to a gross well cost of £3.2 million 
 * For gross well costs above the £3.2 million cap, UJO will pay 7.5% and
Europa 32.5% 
 * In the event of a discovery of petroleum on the licence UJO has agreed to
make a deferred payment to Europa of £159,375 covering back costs plus a 25%
uplift 
 
 
 
 
 * PEDL143 is located in an area of the Weald Basin where 14 oil and gas
fields have been found, resulting in the discovery of an estimated 50 million
barrels of oil of which 30 million barrels have been produced to date 
 * Holmwood is 5km to the south of the Brockham oil field discovered by BP in
1987 and now operated by Angus Energy and produces oil from Portlandian
sandstone reservoirs 
 * Holmwood lies 12km to the west of the Horse Hill-1 well in PEDL137 where UK
Oil & Gas Investments PLC (‘UKOG’) has reported production at a combined
average stable rate of over 1,688 bopd from Upper and Lower Kimmeridge
Limestone reservoirs and Upper Portland sandstone reservoir during flow tests 
 
 
 * Holmwood well will penetrate similar stratigraphy to Horse Hill and will
target oil in Upper and Lower Kimmeridge Limestones in addition to Corallian
and Portlandian sandstones – prospective resources at Holmwood do not
include any estimate for Jurassic limestones found to be producing in Horse
Hill 
 * Fulfilment of planning conditions and detailed planning and environmental
permitting for the well are all underway 
 * Subject to approval of the farm-out from the Oil & Gas Authority, Europa
will retain a 32.5% interest in and operatorship of PEDL143 alongside Egdon
Resources (18.4%), Altwood Petroleum (1.6%), Warwick Energy (10%), UKOG (30%),
and UJO (7.5%) 
 
 
 Europa CEO Hugh Mackay said, “The farm-out of an interest in Holmwood is in
line with our strategy to advance our multistage portfolio of licences while
at the same time managing risk.  We rate Holmwood as one of the best
undrilled conventional prospects in the UK: gross mean unrisked prospective
resources of 5.6 mmbo; the presence of multiple payzones; and located in a
prolific hydrocarbon producing region close to the Brockham oil field and
Horse Hill discovery.  We are keen to get the drillbit moving and are working
hard to be in a position to commence drilling operations in late 2016 / H1
2017. 
 
 “Success at UK onshore prospects such as Holmwood should have a
transformational impact on the revenue profile of oil and gas companies such
as Europa.  We expect to demonstrate this through our Wressle discovery in
East Lincolnshire, which is expected to more than double our net production
when it comes on stream, targeted in late 2016.  Wressle, combined with
tentative signs of at least a stabilisation in the price of oil, will provide
Europa with a strong cash flow generative platform which we intend to put to
good use to monetise our growing asset base of licences, and in the process
generate value for our shareholders.” 
 
 * * ENDS * * 
 
 For further information please visit http://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   
  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 2015 Europa produced 141
boepd.  Its highly prospective exploration projects include the Wressle
development (targeting production startup later in 2016 at up to 500 bopd
gross) in the UK; 100% owned gas exploration prospect (107 bcf) and appraisal
project (CPR 277 bcf) in onshore France, a joint venture with Vermillion
Energy also in onshore France; and three licences offshore Ireland with the
potential to host gross mean un-risked Prospective Resources of approximately
3 billion barrels across the three licences. 
 
 Qualified Person Review 
 
 This release has been reviewed by Hugh Mackay, Chief Executive of Europa, who
is a petroleum geologist with 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. 
 


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