TIDMEOG
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas
7 April 2016
Europa Oil & Gas (Holdings) plc ("Europa" or "the Company")
Interim Results
Europa Oil & Gas (Holdings) plc, the AIM listed oil and gas exploration and
production company with a combination of producing, appraisal and exploration
assets in Europe, announces its interim results for the six month period ended
31 January 2016.
Highlights
* Three new UK onshore awards in 14th round: a gas appraisal project; an oil
field rejuvenation project; and a pure conventional exploration licence.
* Positive Holmwood planning decision - preparations underway to drill
exploratory well targeting gross mean unrisked prospective resources of 5.6
million boe in the Weald Basin.
* Decision to proceed with Wressle development - on course to commence
production later in 2016.
* Independent assessment estimates mean unrisked NPV of US$7 billion for
three prospects in FEL 3/13 assuming 100% interest following Kosmos
withdrawal.
Financial performance
* Revenue GBP0.6 million (H1 2015: GBP1.3 million).
* Pre-tax loss prior to field impairments of GBP0.6 million, (H1 2015: pre-tax
tax loss prior to field impairments GBP0.3 million).
* Pre-tax loss post field impairments of GBP0.6 million (H1 2015: pre-tax loss
post field impairments of GBP1.4 million).
* Net cash used in operating activities GBP0.5 million (H1 2015: cash generated
GBP0.2 million).
* Cash balance at 31 January 2016 GBP1.8 million (31 July 2015: GBP3.2 million).
Post reporting date events
* Effective 1 March 2016, Europa was awarded Licensing Option LO 16/2
offshore Ireland
Europa's CEO, Hugh Mackay said, "The six months under review highlight how well
Europa is placed to not just weather the current oil price environment, but
also to continue to advance its ever-growing multistage portfolio of licences,
even with an oil price of US$40 per barrel. Our existing UK onshore production
is set to double in the second half of calendar year 2016 once the Wressle
discovery comes online. As well as providing a significant boost to our
revenues, we expect that Wressle will reduce our break-even oil price to
approximately US$30 per barrel. Combined with no debt and net cash as at 31
January 2016 of GBP1.8 million, this will provide us with an excellent cash flow
generative platform with which to develop our portfolio.
"This includes our 100% interest in FEL 2/13, FEL 3/13 and LO 16/2 offshore
Ireland, which have combined gross mean un-risked prospective resources of
approximately 3 billion boe; the Holmwood prospect located close to the Horse
Hill discovery in the Weald Basin, which we are planning to drill within the
next twelve months; as well as the three new highly prospective UK onshore
licences, two of which have already been proven to hold hydrocarbons. I look
forward to providing further updates on our progress, as we seek to close the
gap between our current market cap and the value of our net mean risked and
diluted resources of 99mmboe."
For further information please visit www.europaoil.com or contact:
Hugh Mackay / Phil Greenhalgh Europa +44 (0) 20 7224 3770
Matt Goode / Simon Hicks finnCap Ltd +44 (0) 20 7220 0500
Frank Buhagiar / Susie St Brides Partners Ltd +44 (0) 20 7236 1177
Geliher
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.
Chairman's Statement
Despite the low oil price environment seen in the six months to 31 January
2016, Europa has continued with its programme of selectively expanding its
portfolio and maturing its assets.
Highlights during this period have included:
* The addition of a strategically important exploration block LO 16/2
adjacent to our FEL 3/13 licence in the Porcupine Basin, offshore Ireland.
This acreage was awarded in the first phase of the recent Atlantic Margin
Licensing Round, which was a highly competitive process, with awards being
granted to a number of major international oil companies, including Eni and
BP, ExxonMobil, Nexen, Statoil, and Woodside. Europa has made additional
licence applications and awaits the outcome of the second and final phase
of awards scheduled for mid-May with great interest.
* Europa has identified three prospects on the area covered by the newly
awarded Licensing Option with gross mean unrisked prospective resources of
895 million barrels of oil equivalent ("boe"), which is in addition to the
1.5 billion boe identified on FEL 3/13.
* Following Kosmos' decision to withdraw from the two Irish exploration
licences in the Porcupine Basin where it was carrying Europa through a
discretionary exploration programme, Europa has commenced a farm-out
process for FEL 2/12 and FEL 3/13. We have seen considerable interest from
major oil companies and will report on progress in due course.
* Work continues on the development plan for Wressle, following the initial
discovery and well test which flowed at an aggregate of 710 boepd from four
tests in three conventional sandstone reservoirs.
* The addition of three new exploration licences in the 14th UK Onshore
licensing round, which are in highly prospective locations and, in the case
of Cloughton and Hardstoft, include wells which have already demonstrated
that hydrocarbons are present.
* Planning approval was obtained for an exploration well at Holmwood, which
is a conventional prospect with gross mean unrisked prospective resources
of 5.6 million boe. Located in the Weald Basin, near the recent drilling
success at Horse Hill, Holmwood is a very exciting prospect for Europa and
its partners.
These activities are part of our ongoing programme to mature and grow our
portfolio of prospects and leads and most importantly prove these up via the
drill bit. We also continue to evaluate new venture opportunities with the aim
of strengthening our portfolio.
All of this has been against a backdrop of a continued period of low oil prices
which has seen the price of Brent crude average US$42.8 bbl during the six
months to end January 2016. The oil price collapse has seen a number of E&P
companies suffer from a combination of significantly reduced cash-flow coupled
with high debt repayments, resulting in corporate failure or forced asset
sales. Europa's Board continues to work hard to manage costs and to avoid
incurring debt for its activities, preferring instead to farm out exploration
obligations wherever possible.
Financials
The weakening oil price, and the natural decline in our production, has caused
revenue to fall. During the first half of 2016 an average of 124 boepd were
recovered from our three UK onshore fields which generated GBP0.6 million in
revenue (H1 2015: 145 boepd and GBP1.3 million). Administrative expenses of GBP
355,000 were significantly reduced in the period (H1 2015: GBP612,000 included
non-recurring expenditure on 14th Round licence applications and legal expenses
related to the Tarbes farmout). Stringent cost controls will continue to be
applied in the second half of the year.
Net cash spent on operations was GBP0.5 million (H1 2015: cash generated GBP0.2
million). Purchase of intangible fixed assets GBP0.9 million (H1 2015: GBP1.2
million) included GBP0.4 million spend on Wressle and GBP0.2 million of final
payments relating to the Kiln Lane well. Our cash balance at 31 January 2016
was GBP1.8 million (31 July 2015: GBP3.2 million).
Though the decision to proceed with the development of Wressle has been taken,
the asset has remained classified as an intangible fixed asset at the reporting
date, as planning consent for the development has not been received.
Wressle production at an expected gross initial flowrate of 500 bopd, even at
today's US$40/barrel oil price, will return Europa to a positive operating
cash-flow. It should be noted that following the March Budget which announced a
reduction in the Supplementary Charge with effect from 1 January 2016, future
profits will be taxed at 40% (previously 50%).
Outlook
Whilst the current oil price presents challenges for all E&P companies, I am
confident that Europa has an excellent portfolio of assets and opportunities.
The recent awards in Ireland and the UK have been the result of many months of
hard work by Hugh and the team and will ensure that Europa continues to have a
broad range of licence interests at various stages of maturity. We still await
news on Phase 2 of the Atlantic Margin Licensing Round where we have a number
of outstanding applications.
We have seen the results of the initial technical work on our Porcupine Basin
interests translated into prospective resources confirmed by a Competent
Persons Report on FEL 3/13 with Europa exposed to 1.5 billion boe of gross mean
unrisked prospective resources with a mean Risked NPV10 of US$7 billion. This
does not include the recently awarded Licensing Option with a further 895
million boe and FEL 2/13 with 595 million boe of gross mean unrisked
prospective resources. These are world class prospects in an area which has
seen considerable interest from major oil companies in the last six months.
This bodes well for our ongoing farm out discussions.
In the UK, with Wressle moving from prospect to discovery, we are poised to see
an increase in production, revenue and cash-flow, which should coincide with
(MORE TO FOLLOW) Dow Jones Newswires
April 07, 2016 02:00 ET (06:00 GMT)
work preparing for the exploration well at Holmwood.
Finally, I would like to thank the management and operational teams, directors
and advisers for their hard work and also our shareholders for their continued
support over this six month period.
Colin Bousfield
Chairman
6 April 2016
Operational review
Europa operates exploration, production and appraisal assets across three EU
countries: Ireland, the UK and France.
Ireland - Porcupine Basin Frontier Exploration Licences ("FELs") 2/13 and 3/13
100% (Doyle A/B/C, Heaney and Beckett, Wilde, Shaw)
Europa was initially inspired to enter the South Porcupine Basin in 2011 on the
basis of the Cretaceous stratigraphic play: comprising Early Cretaceous
turbidite sandstone reservoirs; charged by mature Late Jurassic and Early
Cretaceous source rocks and contained in stratigraphic traps with elements of
structural closure. The Cretaceous play in the Porcupine is essentially
undrilled and is considered to be analogous to the Cretaceous play in the
equatorial Atlantic Margin province that has delivered the Jubilee and Mahogany
oil fields. Since 2011 there have been new exploration discoveries in the
Atlantic basins that are also relevant to the Porcupine and we have the benefit
of unique insights from our proprietary 3D seismic. In the Flemish Pass basin
offshore Newfoundland Statoil has pioneered the pre-rift play with their Bay du
Nord discovery. In offshore Senegal Cairn's SNE discovery has opened our eyes
to the potential for early post-rift sculptural events in the Porcupine. There
are therefore at least three essentially undrilled exploration plays in the
South Porcupine Basin.
2,500km2 of 3D seismic data was acquired in 2013 over FEL 2/13 and 3/13 and
what is now LO 16/2 by the then operator Kosmos Energy and this provides the
foundation for our work. Europa conducted its own independent prospect mapping
and this provided the basis for a CPR by ERC Equipoise ("ERCE") on the
prospects and risks in FEL 3/13. ERCE identified gross mean un-risked
Prospective Resources of approximately 1.5 billion barrels of oil equivalent
("boe") across three prospects in FEL 3/13 and gross mean risked Prospective
Resources of 235 million boe. A summary of the CPR was provided to the market
in an RNS dated 12 May 2015. The CPR provides a strong endorsement to Europa's
long held view that the Porcupine Basin has the potential to become a major new
North Atlantic hydrocarbon province.
In addition to the CPR, Europa also commissioned ERCE to complete an
independent assessment of the value of its interests in FEL 3/13. The results
of the study were released to the market in an RNS on 16 June 2015. At the time
Europa held a 15% net interest in the three prospects on the licence which ERCE
estimated had a mean Unrisked Net Present Value at a 10% discount ("NPV10") of
approximately US$1.6 billion. Kosmos has since decided to withdraw from Ireland
and as a result Europa has assumed a 100% interest in both licences. While this
does not change the Gross Unrisked Prospective Resources of 1.5 billion barrels
on FEL 3/13's three prospects, ERCE has adjusted the mean Unrisked Net Present
Value ('NPV') to approximately US$7 billion to reflect Europa's 100% interest.
On a Risked NPV basis the study estimates a 100% working interest at US$1.1
billion. As with the CPR, the valuation has been subjected to rigorous
technical challenge and scrutiny by ERCE.
Europa considers the prospects in FEL 3/13 to be at drillable prospect status.
As a consequence of its detailed work in preparation for the CPR, Europa has
identified both a prospect and shot point location for what would be a
play-opening first well in FEL 3/13. The next step is to prove up the
prospective resources via the drill-bit. With this in mind, on 11 January 2016
Europa opened a data room for the farm-out of both FELs 2/13 and 3/13. The
target farm-in candidates are major and mid-cap oil companies. The Company will
not provide a running commentary on the farm-out progress other than to comment
that the response has been very good and significant majors and mid-caps have
already visited and/or have booked times to visit our data room.
During the course of its mapping of FEL 2/13, Europa has identified new
prospects and leads to those initially identified by Kosmos in the RNS of 8
December 2014 with gross mean unrisked Prospective Resources of 123 million
barrels of oil ("mmbo") for Doyle A and 69 mmbo for Doyle B. Europa has now
identified four prospects Doyle A, B, C and Heaney with combined gross mean
un-risked prospective resources of 595 million boe.
2015 Atlantic Margin Licensing Round and Licensing Option 16/2 ('LO 16/2')
Effective 1 March 2016, Europa was awarded a 100% interest in LO 16/2 in the
South Porcupine Basin. LO 16/2 comprises 522km2 of ground and adjoins the
eastern boundary of FEL 3/13. Europa has identified three new pre-rift
prospects in LO 16/2 with combined gross mean unrisked prospective resources of
895 million boe which were mapped on what is now Europa's proprietary 3D
seismic acquired in 2013. The next steps on LO 16/2 will be to invest further
technical work to mature the prospects to drillable status and deliver a CPR
later in 2016.
There is clear technical and commercial synergy between LO 16/2 and FEL 3/13,
and as a result LO 16/2 will be included as part of the ongoing farm-out
discussions. The combined gross mean unrisked prospective resources across the
three licences are almost 3 billion boe (see table below). For the avoidance of
doubt prospective resources are by definition recoverable.
Licence Gross mean unrisked Comment
prospective resources
million boe
FEL 3/13 1,492 ERCE CPR
LO 16/2 895 Europa in-house
FEL 2/13 595 Europa in-house
Total 2,982
Licence awards in the 2015 Atlantic Ireland round are being conducted in two
phases. The first phase announced on 11 February 2016 was designed to
accommodate applications in areas where seismic acquisition surveys were
planned for summer 2016. Whilst Europa was awarded LO 16/2 in Phase 1, the
Company has not offered firm seismic as part of its work programme since it
already has 3D seismic over the licence area. This seismic was acquired and
processed under the terms of Europa's carried work programme with Kosmos.
Other companies to be awarded licensing options in the Porcupine basin under
Phase 1 include ENI (partnered with BP), ExxonMobil, Statoil, Nexen, Scotia and
Woodside. During the licensing round a total of 43 applications were received
from 17 companies, making it the best ever conducted in Ireland. In the
directors' view this provides a strong endorsement of Europa's long held belief
in the technical and commercial potential of Ireland's Atlantic basins. It is
also notable that a number of successful bidders in the round, specifically
ExxonMobil, BP, Statoil and Nexen, are companies operating on the other side of
the Atlantic in offshore Newfoundland where in 2015 C$1.9 billion was committed
for exploration programmes in the Flemish Pass basin. Statoil has pioneered the
pre-rift play in the Flemish Pass Basin and its 2013 Bay du Nord oil discovery
was the largest discovery in the world that year.
Phase 2 awards will be made in May 2016. Europa has made several applications
which will be considered in this phase. A licence map showing the Phase 1
awards can be found on the Department of Communications, Energy and Natural
Resources ("DCENR") website:
http://www.dcenr.gov.ie/natural-resources/SiteCollectionDocuments/
Oil-and-Gas-Exploration-and-Production/Concession_Map_A3_Feb2016_LR.pdf
UK
NE Lincolnshire - PEDL180 33.3% (Wressle Discovery)
Europa has a 33.3% interest in the PEDL180 licence which covers an area of
100km2 of the East Midlands Petroleum Province and holds the Wressle oil and
gas discovery. Wressle was drilled in 2014 and was production tested in 2015
during which an aggregate of 710 barrels of oil equivalent per day ("boepd")
flowed from four tests in three conventional sandstone reservoirs.
Work is currently focussed on delivering production start-up from the Ashover
Grit later in 2016. The target production rate on start-up is 500 bopd. The
Ashover flowed 80 bopd and 47 thousand cubic feet of gas ("mcfd") on production
test last year, however, the flow was inhibited by formation damage, also known
as "skin". Skin is common in Carboniferous reservoirs in the East Midlands
petroleum province and can be overcome by various well intervention
methodologies. For example, on production start-up in 1986, the Europa operated
Crosby Warren field, which is located 5km from Wressle, encountered problems
with skin flowing at 60 bopd. After stimulation it flowed at 500 bopd and
continues to produce almost 30 years later at 30 bopd. The Ashover Grit at
Wressle is at a similar stratigraphic level to the producing sand at Crosby
Warren and the oil properties are identical. Europa, along with its partners,
is therefore confident that, with appropriately designed and executed
operations, Wressle has the potential to produce 500 bopd of which Europa's
share would be 165 bopd.
The Ashover Grit was just one of the four discrete intervals discovered by the
Wressle exploration well:
* the Ashover Grit - 80 bopd and 47 mcfd free flow;
* the Wingfield Flags - 182 bopd and 456 mcfd free flow ;
* Zone 3b of the Penistone Flags - 12 bopd and 1,700 mcfd free flow;
* Zone 3a of the Penistone Flags - 77 bopd, swabbed.
Europa has a 33.3% working interest in the block with its partners Egdon
Resources (25%), Celtique Energie Petroleum Ltd (33.3%) and Union Jack Oil
(8.3%). Egdon is the operator and is responsible for delivering the Field
(MORE TO FOLLOW) Dow Jones Newswires
April 07, 2016 02:00 ET (06:00 GMT)
Development Plan, Planning Permission, Environment Agency permits and CPR.
PEDL180 holds several other prospects and targets on the Crosby Warren -
Broughton - Wressle trend.
The Weald Basin - PEDL143 40% (Holmwood)
Holmwood is a conventional oil prospect with gross mean unrisked prospective
resources of 5.6 mmbo in Portlandian and Corallian sandstones. The P90 - P10
range of resources is 1 to 11 mmbo which is the typical range for the Weald
Basin based on the 14 oil and gas fields that have been found and produced to
date. Almost 250 wells have been drilled in the Weald Basin of Hampshire, Kent,
Surrey and Sussex resulting in the discovery of some 50 million barrels of oil
of which 30 million barrels have been produced to date. Were drilling Holmwood
to deliver reserves of 5.6 mmbo, it would be the fifth largest onshore UK oil
field.
The Holmwood prospect was first identified by BP in 1988 and Europa intends to
drill the well during the winter of 2016/17, subject to financing or an
acceptable farm-out. This follows the granting of planning permission in 2015
for both the surface well location and underground well path for an exploration
well located in Bury Hill Wood. The Company is working under the supervision of
Surrey County Council to discharge various conditions associated with the
planning permission. In tandem with this detailed well planning is also being
undertaken.
Holmwood lies 12km to the west of the Horse Hill-1 exploration 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
earlier this year. UKOG is also a partner in PEDL143 and will exchange
technical insights as appropriate. The Holmwood exploration well will penetrate
similar stratigraphy to Horse Hill and it is therefore possible that it may
also encounter oil in Upper and Lower Kimmeridge Limestones in addition to
Corallian and Portlandian sandstones (although resources at Holmwood have not
been estimated in Jurassic limestones equivalent to the ones found to be
producing in Horse Hill). Europa has a 40% interest and is operator of PEDL143.
Management is seeking to farm-out an interest prior to drilling the Holmwood
well and the exploration success at Horse Hill is assisting this process.
NE Lincolnshire - PEDL182 33.3% (Broughton)
Following a partial relinquishment under the terms of the licence in June 2015,
PEDL182 covers an area of 19km2. The Broughton prospect was previously drilled
by BP and flowed oil. Broughton is located on structural trend with the
producing Crosby Warren oil field and the Wressle prospect on PEDL180. The
partnership is reprocessing the 2012 3D survey and will be remapping the Crosby
Warren-Wressle trend. Interpretation of the 3D together with the results of the
Wressle discovery may result in new drillable prospects being matured on this
trend.
NE Lincolnshire - PEDL181 50%
PEDL181 is located in the Carboniferous petroleum play and covers an area of
over 540km2 in the Humber Basin. A conventional exploration well was drilled at
the Kiln Lane prospect in February 2015 and reached a total depth of 2,291m in
March 2015. Whilst Carboniferous sandstone reservoirs were penetrated in
accordance with the pre-drill geological forecast these proved to be water wet.
Europa is completing post-well analysis of the Kiln Lane-1 well, in particular
the impact of the well result on the remaining prospectivity on the licence.
The partnership will make a decision regarding its continued activity in the
licence during the year.
Europa has a 50% interest in and is the operator of the PEDL181 licence, with
Egdon Resources UK Limited and Celtique Energie Petroleum Ltd, each holding a
25% interest.
14th UK Landward Licensing Round
In December 2015, Europa was conditionally awarded three licences in the 14th
round onshore UK. These comprise a gas appraisal project (Cloughton), an oil
field rejuvenation project (Hardstoft), and a pure conventional exploration
licence (Goole).
PEDL348 (Cloughton) 22.5%
The licence contains the Cloughton gas discovery made by Bow Valley who drilled
an exploration well and tested gas to surface from Carboniferous sandstone
reservoir in 1986. Europa's interest is to investigate the potential to deliver
commercial quantities of gas from the Cloughton appraisal prospect.
Europa has a 22.5% interest in PEDL348. Third Energy are the operator and their
experience of operating exploration, production and infrastructure in the
region will be invaluable.
PEDL299 (Hardstoft) 16.7%
PEDL299 holds the Hardstoft oil field which was discovered by the UK's first
ever exploration well in 1919. Approximately 26,000 barrels of oil have been
recovered from the field from Dinantian limestone. Europa believes there is
potential to generate commercial oil production from the Dinantian limestone at
Hardstoft by employing modern drilling and production techniques to rejuvenate
the field. Upland Resources, one of Europa's partners in the licence, has
published a CPR by Blackwatch which has identified gross 2C resources of 3.1
million barrels on the portion of the Hardstoft field in PEDL299 and gross best
case unrisked prospective resources of 3.65 mmbo in the Hardstoft East
prospect.
http://uplandres.com/wp-content/uploads/2015/10/
Upland-Resources-Final-Prospectus.pdf.
Europa will have a 16.7% interest in the conventional prospectivity of PEDL299,
INEOS is the operator.
PEDL286 Goole 50%
PEDL286 contains three conventional leads and may represent an extension of the
Crosby Warren - Broughton - Wressle oil trend. To the north, the licence
immediately neighbours a strategic shale gas position built by Cuadrilla with
Bowland-Hodder shale at reasonable depths on the SW margin of the Cleveland
Basin.
Europa has a 50% interest and operatorship of this conventional exploration
licence in the southern Cleveland Basin.
Southern North Sea - block 41/24 50%
The block lies immediately offshore Scarborough on the Yorkshire coast. The
focus of exploration activity is to investigate the potential of Carboniferous
and Zechstein prospectivity. Within block 41/24, the Carboniferous has largely
been overlooked as a viable target to date but there are numerous hydrocarbon
accumulations in the onshore extension of the Cleveland Basin and further south
in the East Midlands. The licence shares technical and commercial synergies
with PEDL348 which lay behind the strategic decision by the partners to apply
for both licences.
Europa was conditionally awarded a 50% interest in a Promote Licence on block
41/24 in the Southern North Sea as part of the 28th Seaward Licensing Round
alongside Arenite Petroleum Limited (50%), a private Scottish company. The
partners are looking to jointly farm-out an interest in block 41/24 and this
process is underway.
UK Onshore Production
West Firsby 100%; Crosby Warren 100%; Whisby W4 well 65%
The three UK fields, plus a small contribution from Wressle, produced an
average of 124 boepd (H1 2015: 144 boepd) during the period under review. The
fields are in long term decline and whilst all opportunities to reduce downtime
and decrease costs are being taken, the best way to access more production is
through the exploration drill bit. The Wressle discovery is expected to more
than double Europa's production when it comes online later in 2016.
France - Béarn des Gaves 100% (Berenx)
Europa holds a 100% interest in the onshore Béarn des Gaves permit in the
Aquitaine basin, the heartland of the French oil industry. The permit contains
two prospects: Berenx Deep and Berenx Shallow. In 2013, the permit was renewed
to 22 March 2017 with an expenditure commitment of approximately EUR2.5 million.
A farm-out process to secure a partner with whom to advance the permit is
ongoing.
France - Tarbes Val d'Adour 20%
Tarbes Val d'Adour Permit ('Tarbes') is also located in the Aquitaine basin
onshore France close to the giant Lacq - Meillon gas fields.
In February 2015, Europa completed a farm-out of Tarbes with Vermilion REP SAS,
a wholly owned subsidiary of Vermilion Energy Inc ('Vermilion') a Calgary,
Alberta based international oil and gas producer. The farm-out is subject to
the relevant approvals being granted by the French authorities including the
transfer of equity and operatorship to Vermilion and also obtaining an
extension for the permit. Both these processes are underway. An update to the
market will be provided once the French authorities provide the relevant
approvals.
Conclusion
The six months under review has seen Europa significantly expand its multistage
portfolio of licences in offshore Ireland and onshore UK: the award of a new
strategically important licensing option in Ireland, which increases Europa's
estimate of gross mean unrisked prospective resources to approximately three
billion barrels of oil equivalent; and the granting of three new licences
onshore UK, all of which have significant development potential. As well as
successfully expanding the Company's portfolio, progress continues to be made
in advancing Europa's existing UK licences. The Wressle discovery, which has
the potential to double the Company's existing production, remains on track to
come online later in 2016. Meanwhile at Holmwood preparations for an
exploration well are being advanced.
With further potential licence awards offshore Ireland, farm-outs ongoing for
all three Irish licences, Holmwood, and the Bearn-des-Gaves permit, the next
six months will see further active management of Europa's asset base. This is
in line with the Company's strategy to monetise the underlying value we have
identified across the portfolio, and in the process generate significant value
for shareholders.
Hugh Mackay
CEO
6 April 2016
(MORE TO FOLLOW) Dow Jones Newswires
April 07, 2016 02:00 ET (06:00 GMT)
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 33% Development
PEDL181 Europa 50% Exploration
PEDL182 Broughton Egdon 33% Exploration
PEDL286 Goole Europa 50% Exploration
PEDL299 Hardstoft INEOS 16.7% Exploration
PEDL348 Cloughton Third 22.5% Exploration
Energy
Weald PEDL143 Holmwood Europa 40% Exploration
SNS Block 41/24 Arenite 50% Exploration
Ireland Porcupine FEL 2/13 Doyle A/B/C, Europa 100% Exploration
Heaney
FEL 3/13 Beckett, Wilde Europa 100% Exploration
Shaw (lead)
LO 16/2 PR1, PR2. PR3 Europa 100% Exploration
France Aquitaine Béarn des Berenx Deep Europa 100% Exploration/
Gaves Appraisal
Béarn des Berenx Shallow Europa 100% Exploration/
Gaves Appraisal
Tarbes val Vermilion 20% Exploration/
d'Adour Appraisal
Financials
Unaudited consolidated statement of comprehensive income
6 months to 31 January 2016 6 months to 31 January 2015 Year to
31 July
2015
(audited)
GBP000 GBP000 GBP000
Revenue 624 1,285 2,205
Other cost of sales (765) (944) (1,900)
Exploration write-off - - (2,205)
Impairment of producing fields - (1,100) (1,100)
Total cost of sales (765) (2,044) (5,205)
------------------------------------- ------------------------------------- -------------------------------------
Gross loss (141) (759) (3,000)
Administrative expenses (355) (612) (977)
Finance income 34 62 55
Finance expense (115) (105) (208)
------------------------------------- ------------------------------------- -------------------------------------
Loss before taxation (577) (1,414) (4,130)
Taxation credit 209 587 2,346
------------------------------------- ------------------------------------- -------------------------------------
Total comprehensive loss for the period
attributed to the equity holders of the (368) (827) (1,784)
parent
======================== ======================== ========================
Pence per share Pence per share Pence per share
Loss per share (LPS) attributable
to the equity shareholders of the parent
Attributable to the equity shareholders
of thw
Basic and diluted LPS (note 4) (0.15)p (0.40)p (0.86)p
Unaudited consolidated statement of financial position
31 January 2016 31 January 2015 31 July
2015
(audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Intangible assets 5,125 4,516 4,839
Property, plant and equipment 1,463 1,795 1,562
Deferred tax asset 101 475 -
------------------------------------- ------------------------------------- -------------------------------------
Total non-current assets 6,689 6,786 6,401
------------------------------------- ------------------------------------- -------------------------------------
Current assets
Inventories 15 38 13
Trade and other receivables 254 684 374
Cash and cash equivalents 1,758 3,569 3,151
------------------------------------- ------------------------------------- -------------------------------------
2,027 4,291 3,538
------------------------------------- ------------------------------------- -------------------------------------
Total assets 8,716 11,077 9,939
==================== ==================== ========================
Liabilities
Current liabilities
Trade and other payables (200) (1,299) (1,043)
Current tax liability (144) (220) (141)
Derivative (29) (40) (32)
Short-term borrowings (23) (23) (23)
------------------------------------- ------------------------------------- -------------------------------------
Total current liabilities (396) (1,582) (1,239)
------------------------------------- ------------------------------------- -------------------------------------
Non-current liabilities
Long-term borrowings (129) (152) (141)
Deferred tax liabilities - (2,259) (109)
Long-term provisions (2,245) (2,054) (2,143)
------------------------------------- ------------------------------------- -------------------------------------
Total non-current liabilities (2,374) (4,465) (2,393)
------------------------------------- ------------------------------------- -------------------------------------
Total liabilities (2,770) (6,047) (3,632)
------------------------------------- ---------------------------------- -------------------------------------
(MORE TO FOLLOW) Dow Jones Newswires
April 07, 2016 02:00 ET (06:00 GMT)
Net assets 5,946 5,030 6,307
==================== ==================== ========================
Capital and reserves attributable to
equity holders of the parent
Share capital 2,449 2,049 2,449
Share premium 15,901 14,080 15,901
Merger reserve 2,868 2,868 2,868
Retained deficit (15,272) (13,967) (14,911)
------------------------------------- ------------------------------------- -------------------------------------
Total equity 5,946 5,030 6,307
===================== ======================== ========================
Unaudited consolidated statement of changes in equity
Share Share Merger Retained Total equity
capital premium reserve deficit
GBP000 GBP000 GBP000 GBP000 GBP000
Unaudited
Balance at 1 August 2,049 14,080 2,868 (13,154) 5,843
2014
Total comprehensive - - - (827) (827)
loss for the period
Share based payments - - - 14 14
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31 January 2,049 14,080 2,868 (13,967) 5,030
2015
======================= ======================= ======================= ======================= =======================
Audited
Balance at 1 August 2,049 14,080 2,868 (13,154) 5,843
2014
Issue of share capital 1,821 -
net of issue costs 400 - 2,221
(note 3)
Loss for the year - - - (1,784) (1,784)
attributable to the
equity shareholders of
the parent
Share based payments - - - 27 27
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31 July 2,449 15,901 2,868 (14,911) 6,307
2015
======================= ======================= ======================= ======================= =======================
Unaudited
Balance at 1 August 2,449 15,901 2,868 (14,911) 6,307
2015
Total comprehensive - - - (368) (368)
loss for the period
Share based payments - - - 7 7
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31 January 2,449 15,901 2,868 (15,272) 5,946
2016
======================= ======================= ======================= ======================= =======================
Unaudited consolidated statement of cash flows
6 months to 31 January 2016 6 months to 31 January 2015 Year to
31 July
2015
(audited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Loss after taxation (368) (827) (1,784)
Adjustments for:
Share based payments 7 14 27
Depreciation 99 156 386
Exploration write-off - - 2,205
Impairment of property, plant & equipment - 1,100 1,100
Disposal of fixed asset - - 2
Finance income (34) (62) (55)
Finance expense 115 105 208
Taxation credit (209) (587) (2,346)
Decrease /(increase) in trade and other 120 (46) 79
receivables
(Increase) / decrease in inventories (2) (6) 19
(Decrease)/increase in trade and other (209) 360 (102)
payables
----------------------------------- ----------------------------------- -------------------------------------
Net cash (used in)/ from operating (481) 207 (261)
activities
======================== ======================== ========================
Cash flows used in investing activities
Purchase of property, plant & equipment - (1) (4)
Purchase of intangibles (915) (1,184) (3,394)
Expenditure on well decommissioning - - (4)
Interest received 3 5 7
------------------------------------- ------------------------------------- -------------------------------------
Net cash used in investing activities (912) (1,180) (3,395)
======================== ======================== ========================
Cash flows from financing activities
Proceeds from issue of share capital (net - - 2,221
of issue costs)
Increase in payables related to share - - 71
capital issue costs
Repayment of borrowings (12) (11) (22)
Finance costs (10) (18) (18)
------------------------------------- ------------------------------------- -------------------------------------
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April 07, 2016 02:00 ET (06:00 GMT)
Net cash (used in)/ from financing (22) (29) 2,252
activities
======================== ======================== ========================
Net decrease in cash and cash equivalents (1,415) (1,002) (1,404)
Exchange gain on cash and cash equivalents 22 70 54
Cash and cash equivalents at beginning of 3,151 4,501 4,501
period
------------------------------------- ------------------------------------- -------------------------------------
Cash and cash equivalents at end of period 1,758 3,569 3,151
======================== ======================== ========================
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 6 April 2016.
The consolidated interim financial information for the period 1 August 2015 to
31 January 2016 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 2014 to 31 January 2015 and
the audited financial year to 31 July 2015.
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 2015.
The comparatives for the full year ended 31 July 2015 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 cash inflow from the Group's producing assets, and the expectation of
cash-flow from development assets, the Directors have concluded, at the time of
approving the financial statements, 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 these financial statements.
Accordingly they continue to adopt the going concern basis in preparing the
financial statements.
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 2016.
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
The table below shows all shares issued since 31 July 2014.
6 months to 31 January 2016 6 months to 31 January 2015 Year to
31 July
2015
(audited)
Allotted, called up and fully paid ordinary Shares Shares Shares
shares of 1p
Start of period 244,888,011 204,883,024 204,883,024
Issued in the period - - 40,004,987
----------------------------------------------------- ----------------------------------------------------- -----------------------------------------------------
End of the period 244,888,011 204,883,024 244,888,011
GBP000 GBP000 GBP000
Start of period 2,449 2,049 2,049
Issued in the period - - 400
-------------------------------- -------------------------------- --------------------------------
End of the period 2,449 2,049 2,449
============ ============ =============
Ordinary shares issued 2015
Date Type of Number of shares Issue Raised net Nominal
issue price of costs value
GBP000 GBP000
10 July 2015 Placing 20,000,000 6p 1,059 200
24 July 2015 Placing 2,630,000 6p 150 26
24 July 2015 Open offer 17,374,987 6p 1,012 174
--------------------------------------------------------- -------------------------------- --------------------------------
40,004,987 2,221 400
All the authorised and allotted shares are of the same class and rank pari
passu.
4 Loss per share (LPS)
Basic LPS has been calculated on the loss after taxation divided by the
weighted average number of shares in issue during the period. Diluted LPS 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 3.69p which was below the
exercise price of all 11,965,000 outstanding share options (H1 2015: 7.35p
which was above the exercise price of 1,391,626 of the 14,016,626 outstanding
share options).
The calculation of the basic and diluted loss per share is based on the
following:
6 months to 6 months to Year to
31 January 31 January 31 July
2016 2015 2015
(audited)
GBP000 GBP000 GBP000
Losses
Loss for the period attributable to the (368) (827) (1,784)
equity shareholders of the parent
============= ============= =============
===== ===== =====
Number of shares
Weighted average number of ordinary 244,888,011 204,883,024 206,526,969
shares for the purposes of basic LPS
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Weighted average number of ordinary 244,888,011 205,196,140 206,526,969
shares for the purposes of diluted LPS
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
Effective 1 March 2016, Europa was awarded Licensing Option 16/2 offshore
Ireland.
END
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