TIDMEOG
RNS Number : 1293X
Europa Oil & Gas (Holdings) PLC
24 April 2023
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG /
Sector: Oil & Gas
24 April 2023
Europa Oil & Gas (Holdings) plc
("Europa" or the "Company")
Interim Results
Europa Oil & Gas (Holdings) plc, the AIM quoted UK and
Ireland focused oil and gas exploration, development and production
company , announces its unaudited interim results for the six-month
period ended 31 January 2023.
Financial Performance
-- Highest interim revenues recorded in Company's history as a
result of continued excellent operational performance and a strong
oil price
-- Revenue GBP3.7 million (H1 2022: GBP2.2 million)
-- Gross profit GBP1.5 million (H1 2022: GBP0.9 million)
-- Pre-tax loss of GBP1.3 million (H1 2022: pre-tax profit
GBP0.7 million) after exploration impairment charge of GBP1.7
million (H1 2022: impairment reversal GBP0.4 million)
-- Net cash from operating activities GBP1.7 million (H1 2022: GBP0.9 million)
-- Unrestricted cash balance at 31 January 2023: GBP5.1 million (31 July 2022: GBP1.4 million)
Operational Highlights
Onshore UK - Wressle oilfield continues to exceed expectations,
generating strong levels of revenues and production
-- Total production net to Europa averaged 268 bopd during the
H1 period, a 29% increase on H1 last year
-- Wressle net production to Europa increased 55% from 134 bopd
to 207 bopd as the field performed better than expected
-- Wressle now the second most productive onshore UK oilfield
-- The well continues to produce under natural flow with zero
water cut and remains highly cash generative
-- A new seismic interpretation and mapping exercise across the
Wressle field has highlighted a potentially significant increase in
resources from the Ashover Grit and the results of the analysis are
now being incorporated into the field development plan. The
intention is that the next development well will be drilled from
the existing Wressle site and planning and permitting work for the
well is ongoing. The well will be drilled at the earliest
opportunity, subject to receipt of regulatory approval
-- Ongoing work to utilise the associated gas being produced
from Wressle which is expected to lead to further increases in oil
production during H2 2023
-- An independent technical report has been commissioned which
will incorporate the new field interpretation, historical
production performance data and the field development plan. The
report is expected to be completed during June 2023
Offshore Ireland - Low risk / high reward infrastructure-led
exploration in the proven Slyne Basin gas play
-- The FEL 4/19 licence extension was granted by the Irish
Government, extending the initial phase to January 2024
-- Licence FEL 4/19 contains the Inishkea gas exploration
prospect, estimated by ERCE, a third-party reserves auditor to hold
1.5 tcf of recoverable gas
-- A farm-out process has begun which is expected to conclude by
year end 2023, with the aim of bringing in a partner to assist with
the drilling of the prospect
-- Given the security of supply issues that Ireland faces, the
Board believes that it is in the interest of Ireland that this
prospect is drilled as soon as reasonably possible, especially as
local existing infrastructure would make any development a low
carbon intensity project
Offshore UK
-- Progress continues with the development of the Serenity oil
discovery in the Central North Sea alongside our partner i3
Energy
-- Despite drilling an appraisal well in October 2022 that
failed to encounter hydrocarbons, the partners believe that
Serenity offers a commercially viable development opportunity with
a number of potential development scenarios available given local
infrastructure
-- A future development could result in approximately 1,000 bopd net to Europa's 25% interest
Morocco
-- The extension to the Initial Period of the Inezgane Licence
offshore Morocco announced on 21 October 2020 came to an end in
November 2022, and Europa decided not to progress to the First
Extension Period
ESG
-- Initiated ESG review focused on integrating the ESG
principles adopted by Europa into the Company's planning and wider
strategy
-- Europa contributes to the Wressle Community Fund, which has
been operating since early 2022 and provides funds to meet the
needs of local charities and community groups. The Company and its
Wressle JV partners make an annual contribution of GBP100,000 to
the fund
Post Period
-- In March 2023, the Company announced that Simon Oddie was
stepping down as CEO, with Will Holland moving from his role as CFO
to replace him with immediate effect
-- The operator of Wressle announced that gross revenues from
the field since August 2021 had reached US$35.0 million by late
March 2023, representing approximately US$10.5 million net to
Europa
-- On 3 April 2023 Alastair Stuart, a petroleum engineer with
over 30 years of experience, was appointed Chief Operating Officer
and an Executive Director of the Company. Mr Stuart has been a
consultant at Europa since 2012 and more recently has been
intimately involved in the development of the Wressle Field
-- In order to ensure that the finance function within Europa is
suitably resourced, the Company has increased its existing mandate
with Clifton Financial Solutions Limited ("Clifton"). Clifton
already provides accounting services to Europa and from April 2023
will also provide administrative services that would typically fall
under the remit of a CFO
Will Holland, CEO of Europa, said :
"I am pleased to report my first set of interim results as CEO
showing record operational numbers which resulted in Europa
continuing to be in a strong financial position. These numbers were
all generated whilst Simon Oddie was CEO and are a testament to the
excellent job that he has done at Europa since 2018.
The Wressle oilfield's continued excellent performance has
underpinned our significant growth in revenues during the period,
and a number of projects are underway to enable increased oil
production and gas monetisation from the field. The first phase of
the gas utilisation project was completed in January 2023, whereby
three microturbines were connected to provide site power which have
resulted in a c. 10% increase in oil production. The second stage
is the installation of a gas engine to generate 1.4 MW of
electricity into a local private power network.
In addition to building on our corporate ESG framework, the
cornerstone of our long-term commitment to the global energy
transition, we initiated a farm-out process for our Irish offshore
licence FEL 4/19. Within the licence is the extensive Inishkea gas
prospect containing an estimated 1.5 tcf of gas, and we recognise
the significant potential of FEL 4/19 to help alleviate Ireland's
energy security concerns by providing the nation with a dependable
source of gas produced with low carbon emissions.
Europa remains a highly cash generative business, and our robust
financial foundations will enable us to continue to work towards
optimising our existing assets in the second half of the year,
whilst we also pursue potential UK offshore and onshore
opportunities to add to our well-balanced portfolio and deliver
further value for shareholders. "
* *S * *
For further information, please visit www.europaoil.com or
contact:
William Holland / Murray Europa Oil & Gas (Holdings) mail@europaoil.com
Johnson plc
Strand Hanson Limited
- Nominated & Financial +44 (0) 20 7409
James Dance / James Spinney Adviser 3494
+44 (0) 20 7186
Peter Krens Tennyson Securities 9033
Patrick d'Ancona / Finlay + 44 (0) 20 7390
Thomson / Kendall Hill Vigo Consulting 0230
Notes to Editors
Europa Oil & Gas (Holdings) plc has a diversified portfolio
of multi-stage hydrocarbon assets which includes production,
development and exploration interests, in countries that are
politically stable, have transparent licensing processes, and offer
attractive terms. Average production for the 6-month period ending
31 January 2023 was 268 bopd. In April 2022, Europa farmed into
P.2358, Block 13/23c ("Serenity") in the Outer Moray Firth area of
the North Sea. The licence contains the 2019 Serenity oil
discovery, in which Europa now has a 25% interest. The Company
holds one exploration licence offshore Ireland, which has the
potential to host gross mean un-risked prospective resources of 1.5
trillion cubic feet ("tcf") gas. Inishkea is a near field gas
prospect in the Slyne Basin which the Company classifies as lower
risk due to its close proximity to the producing Corrib gas field
and associated gas processing infrastructure.
Chairman's Statement
The first half of the financial year was a significant period
for Europa, and the outstanding performance of Wressle, our
flagship producing asset, has enabled us to strengthen our
financial foundations by continuing to deliver material cashflow,
facilitating further investment in our existing assets. Europa
welcomed the UK Government's 33(rd) offshore oil and gas licensing
round, and we remain in a favourable position to pursue
opportunities in the North Sea, as well as onshore UK, to add
domestic projects with minimal emissions to our already diverse
asset portfolio.
In the period, we delivered revenue growth of 68% to GBP3.7
million (H1 2022: GBP2.2 million), driven by Wressle's impressive
daily production rate of 689 bopd during the period. Compared to H1
2022, n et cash increased substantially to GBP5.1 million in the
first half of the financial year (H1 2022: GBP0.6 million), whilst
the average realised oil price increased by 13% to US$88 per
barrel. Planned gas monetisation solutions for Wressle, coupled
with the planned drilling of a development well scheduled for H2
2023, demonstrates our continued commitment to upgrading this key
asset to augment production and generate additional revenues,
whilst also eliminating gas flaring from the field.
We are actively focused on finding a partner to farm-in to our
FEL 4/19 licence located off the west coast of Ireland. The licence
contains the extensive, low-risk Inishkea prospect and could
potentially play an integral role in the energy transition by
providing Ireland with a dependable source of indigenous energy
that is projected to have a much lower carbon footprint than gas
imported from Europe. Inihskea could provide over 60% of the
forecast Irish gas demand for up to 10 years and the development of
a discovery would form an essential element of Ireland's energy
security. As well as providing for c.180 high quality secure jobs
for another c.15 years, Inishkea gas also has an extremely low
emissions intensity. It is estimated that Inishkea gas production
would be one twelfth of the emissions intensity of UK imported gas,
and less than one fiftieth of the emissions intensity of LNG
imported from the USA. In H1 2023, the Irish Government granted an
extension to the first phase of our licence, which now runs until
January 2024, and we look forward to working constructively with
the Department of the Environment, Climate and Communications as we
seek to progress FEL 4/19 to drilling .
Although our appraisal well at Serenity did not encounter
oil-bearing sands, Europa continues to explore options for the
development of the oilfield in the Central North Sea. We are
currently evaluating with our partners the possibility of
developing the discovered reserve via the Repsol Sinopec's Tain
field, which could be as a unified development and potentially
highly material to Europa.
On behalf of the Board, I would like to express my sincere
thanks to Simon Oddie for his hard work and leadership as CEO of
Europa and wish him well as he begins his well-earned retirement. I
am glad that he has agreed to continue as a non-executive director
at Europa and look forward to continuing to work with him in a
non-executive capacity. I would also like to thank our management
team, employees, and consultants for their hard work and dedication
over the course of the reporting period and beyond. We also thank
our shareholders for their continued support and look forward to
updating the market on our operational and business activities
during this exciting period for the Company.
Mr Brian O'Cathain (Non-Executive Chairman)
24 April 2023
Operational Review
Financials
Average daily H1 2023 production was 268 boepd compared to 208
boepd in H1 2022. There was a 13% increase in average realised oil
price to US$88 per barrel (H1 2022: US$77.84). Foreign exchange
movements had a slight positive impact on revenues as US dollar
sales converted to pound sterling at US$1.18 (H1 2022:
US$1.35).
-- Revenue was GBP3.7 million (H1 2022: GBP2.2 million)
-- Net cash received from operating activities was GBP1.7 million (H1 2022: GBP0.9 million)
-- The Group's unrestricted cash balance as at 31 January 2023
was GBP5.1 million (31 July 2022: GBP1.4 million)
Based upon the Group cashflow forecasts, the Directors have
concluded that there is a reasonable expectation that the Group
will be able to 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. Further
comments on going concern are included in note 1 to the financial
statements below.
Conclusion and Outlook
We delivered a strong H1 2023 financial performance, underpinned
by the high levels of revenue generated from our UK onshore
producing assets, particularly the Wressle oilfield. In addition to
substantially increasing our revenues to GBP3.7 million (H1 2022:
GBP2.2 million) and achieving a gross profit of GBP1.5 million (H1
2022: GBP0.9 million), we also considerably strengthened our
balance sheet, resulting in net cash of GBP5.1 million at the end
of the period. Wressle, currently the second most productive
onshore UK oilfield, continues to surpass all expectations, and we
remain committed to further enhancing the field's efficiency and
increasing production through gas monetisation solutions, alongside
advancing the development drilling to enable further
production.
During H1 2023, the first phase of our 100%-owned offshore
Ireland licence FEL 4/19, which contains two prospects that have
the potential to deliver over 2 tcf of gas, was extended by the
Irish authorities. With the Inishkea prospect located only 11km
from the producing Corrib gas field, we believe FEL 4/19 has the
potential to provide Ireland with a reliable fast track gas
development to supply low carbon emission energy, helping satisfy
the nation's energy security demands alongside accommodating the
transition to net zero. Following the extension, we are well
positioned to continue conducting technical studies of the licence
as we focus on securing a partner to farm-in to the project.
Bolstered by the UK Government's continued commitment to
investing in the exploration of North Sea hydrocarbons, we continue
to assess development options for the offshore UK Serenity oilfield
alongside partner i3 Energy. With Serenity strategically located
nearby existing infrastructure, one cost-effective solution we are
exploring is to develop the discovered reserve via Repsol Sinopec's
Tain Field. A potential unitised development could deliver
significant benefits to Europa and our shareholders, with net
production to Europa anticipated to be c.1,000 bopd.
During the period, we continued to work on our ESG strategy to
ensure that the ESG principles adopted by Europa Board are
integrated into our planning and wider strategy. We have pledged to
go beyond the necessary ESG-related requirements of an AIM-quoted
company and look forward to building on the significant ESG
progress generated in H1 2023 to help contribute to the 2050 Net
Zero target.
With a balanced portfolio of producing, appraisal, and
exploration assets, Europa is ideally placed to explore further
opportunities to develop and acquire high potential assets which
could facilitate the energy transition and generate additional
value for our shareholders. Management looks ahead to the second
half of the financial year with confidence and remains fully
focused on delivering our strategic priorities.
Will Holland
CEO
22 April 2023
Qualified Person Review
This release has been reviewed by Alastair Stuart, Chief
Operating Officer, who is a petroleum engineer with over 35 years'
experience and a member of the Society of Petroleum Engineers and
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
Ireland Slyne Basin FEL 4/19 Inishkea, Europa 100% Exploration
Inishkea
West
-------------- -------------- -------------- --------- ------- ------------
UK East Midlands DL 003 West Firsby Europa 100% Production
-------- -------------- -------------- -------------- --------- ------- ------------
DL 001 Crosby Warren Europa 100% Production
-------- -------------- -------------- -------------- --------- ------- ------------
PL199/215 Whisby-4 BPEL 65% Production
199/215
-------------- -------------- --------- ------- ------------
PEDL180 Wressle Egdon 30% Development
-------------- -------------- --------- ------- ------------
PEDL181 Europa 50% Exploration
-------------- -------------- --------- ------- ------------
PEDL182 Broughton Egdon 30% Exploration
North
-------------- -------------- --------- ------- ------------
PEDL299 Hardstoft Ineos 25% Appraisal
-------------- -------------- --------- ------- ------------
PEDL343 Cloughton Egdon 40% Appraisal
-------------- -------------- -------------- --------- ------- ------------
Central P.2358, BLOCK Serenity i3 25% Exploration
North Sea 13/23C
-------- -------------- -------------- -------------- --------- ------- ------------
Financials
Unaudited condensed consolidated statement of comprehensive
income
Year to
31 July
2022
6 months 6 months
to 31 January to 31 January
2023 2022 (audited)
GBP000 GBP000 GBP000
Continuing
operations
Revenue 3,695 2,191 6,584
------------------ --------------------------------------------- --------------------------------------------- --------------------------------------
Cost of sales (2,135) (1,246) (3,806)
Impairment of
producing fields (18) - (570)
------------------ --------------------------------------------- --------------------------------------------- --------------------------------------
Total cost of
sales (2,153) (1,246) (4,376)
------------------------------------- ------------------------------------- ---------------------------------
Gross profit 1,542 945 2,208
Exploration (write
off)/write back
(note 3) (1,685) 360 -
Administrative
expenses (846) (463) (821)
Finance income 1 20 239
Finance expense (299) (119) (238)
------------------------------------- ------------------------------------- ---------------------------------
(Loss)/profit
before taxation (1,287) 743 1,388
Taxation (note 5) - - (32)
------------------------------------- ------------------------------------- ---------------------------------
(Loss)/profit for
the period (1,287) 743 1,356
Other
comprehensive
income
Items that will
not be
reclassified
to loss, net of
tax
Loss on investment
revaluation (8) (17) (18)
------------------------------------- ------------------------------------- -------------------------------------
Total
comprehensive
(loss)/income
for the period
attributed to the
equity
shareholders of
the parent (1,295) 726 1,338
======================== ======================== ========================
Pence per Pence per Pence per
share share share
Earnings/(loss)
per share (EPS)
attributable
to the equity
shareholders of
the parent
Attributable to
the equity
shareholders
of the
Basic EPS (note 4) (0.13)p 0.13p 0.19p
Diluted EPS (note
4) (0.13)p 0.13p 0.18p
Unaudited condensed consolidated statement of financial
position
31 July
2022
31 January 31 January
2023 2022 (audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Intangible assets (note 6) 6,769 2,960 3,785
Property, plant and equipment
(note
7) 2,526 4,006 3,021
------------------------------------- ------------------------------------- -------------------------------------
Total non-current assets 9,295 6,966 6,806
------------------------------------- ------------------------------------- -------------------------------------
Current assets
Investments 16 25 24
Inventories 26 50 36
Trade and other receivables 1,509 822 1,866
Restricted cash - 238 6,884
Cash and cash equivalents 5,146 624 1,394
------------------------------------- ------------------------------------- -------------------------------------
Total current assets 6,697 1,759 10,204
------------------------------------- ------------------------------------- -------------------------------------
Total assets 15,992 8,725 17,010
==================== ==================== ========================
Liabilities
Current liabilities
Borrowing (note 8) - (10) (40)
Trade and other payables (1,602) (1,177) (1,573)
------------------------------------- ------------------------------------- -------------------------------------
Total current liabilities (1,602) (1,187) (1,613)
------------------------------------- ------------------------------------- -------------------------------------
Non-current liabilities
Borrowings (note 8) - (35) -
Trade and other payables (15) (11) (4)
Long-term provisions (note 9) (4,372) (3,510) (4,164)
---------------------------------- ---------------------------------- -------------------------------------
Total non-current liabilities (4,387) (3,556) (4,168)
---------------------------------- ---------------------------------- -------------------------------------
Total liabilities (5,989) (4,743) (5,781)
----------------------------------- ----------------------------------- -------------------------------------
Net assets 10,003 3,982 11,229
==================== ==================== ========================
Capital and reserves
attributable
to equity holders of the
parent
Share capital 9,592 5,665 9,565
Share premium 23,682 21,157 23,660
Merger reserve 2,868 2,868 2,868
Retained deficit (26,139) (25,708) (24,864)
---------------------------------- ---------------------------------- -------------------------------------
Total equity 10,003 3,982 11,229
===================== ======================== =======================
Unaudited condensed 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
2022 9,565 23,660 2,868 (24,864) 11,229
Comprehensive
income
for the period
Loss for the
period
attributable
to the
equity
shareholders
of the parent - - - (1,287) (1,287)
Other
comprehensive
loss
attributable
to the equity
shareholders
of the parent - - - (8) (8)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Total
comprehensive
income for
the period - - - (1,295) (1,295)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Contributions
by
and
distributions
to owners
Issue of share
capital 27 22 - - 49
Share-based
payments - - - 20 20
---------------------------------- ---------------------------------- ---------------------------------- --------------------------------- ------------------------------
Total
transactions
with owners 27 22 - 20 69
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31
January
2023 9,592 23,682 2,868 (26,139) 10,003
======================= ======================= ======================= ======================= =======================
Unaudited
Balance at 1
August
2021 5,665 21,157 2,868 (26,441) 3,249
Profit for the
period
attributable
to the
equity
shareholders
of the parent - - - 743 743
Other
comprehensive
loss
attributable
to the equity
shareholders
of the parent - - - (17) (17)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Total
comprehensive
loss for the
period - - - 726 726
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Contributions
by
and
distributions
to owners
Share-based
payments - - - 7 7
---------------------------------- ---------------------------------- ---------------------------------- --------------------------------- ------------------------------
Total
transactions
with owners - - - 7 7
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31
January
2022 5,665 21,157 2,868 (25,708) 3,982
======================= ======================= ======================= ======================= =======================
Audited
Balance at 1
August
2021 5,665 21,157 2,868 (26,441) 3,249
Profit for the
year
attributable
to the
equity
shareholders
of the parent - - - 1,356 1,356
Other
comprehensive
loss
attributable
to the equity
shareholders
of the parent - - - (18) (18)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Total
comprehensive
loss for the
year - - - 1,338 1,338
--------------------------------- --------------------------------- -------------------------------- ------------------------------ -------------------------------
Contributions
by
and
distributions
to owners
Issue of share
capital 3,900 2,722 - - 6,622
Issue of share
warrants - (219) - 219 -
Share-based
payments - - - 20 20
---------------------------------- ---------------------------------- ---------------------------------- --------------------------------- ------------------------------
Total
transactions
with owners 3,900 2,503 - 239 6,642
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Balance at 31
July
2022 9,565 23,660 2,868 (24,864) 11,229
================================== ================================== ================================== =============================== ==============================
Unaudited condensed consolidated statement of cash flows
Year to
31 July
6 months 6 months
to to 2022
31 January 31 January
2023 2022 (audited)
GBP000 GBP000 GBP000
Cash flows generated from
operating
activities
(Loss)/profit after
taxation (1,287) 743 1,356
Adjustments for:
Share-based payments 20 7 20
Depreciation 551 627 1,618
Taxation charge
recognised in
profit
and loss - - 32
Impairment of
producing fields 18 - 570
Exploration
write-off 1,685 - -
Reversal of cost
accrual on
relinquishment
of licences - (360) -
Finance income - (20) -
Finance expense 299 119 238
Decrease/(increase)
in trade and
other receivables 356 (300) (1,344)
(Increase)/decrease
in inventories 10 (27) (13)
Decrease in trade
and other payables 54 90 18
----------------------------------- ----------------------------------- -------------------------------------
Net cash generated from
operations 1,706 879 2,495
Income taxes paid - - (32)
----------------------------------- ----------------------------------- -------------------------------------
Net cash generated from
operating
activities 1,706 879 2,463
======================== ======================== ========================
Cash flows from/(used in)
investing
activities
Purchase of property,
plant & equipment (74) (406) (403)
Purchase of intangibles (4,669) (487) (1,246)
Cash guarantee re Morocco 260 - -
Cash escrow deposit re
Serenity 6,622 - (6,621)
Interest received - - -
------------------------------------- ------------------------------------- -----------------------------------------------
Net cash from/(used in)
investing
activities 2,139 (893) (8,270)
======================== ======================== ========================
Cash flows (used in)/from
financing
activities
Gross proceeds from issue
of share
capital 49 - 7,020
Costs incurred on issue
of share
capital - - (398)
New borrowings 1,000 - -
Repayment of borrowings (1,040) (5) (10)
Lease liability payments (14) (7) (14)
Lease liability interest
payments (2) (1) (2)
Finance costs (89) (2) (3)
------------------------------------- ------------------------------------- --------------------------------------
Net cash (used in)/from
financing
activities (96) (15) 6,593
======================== ======================== ========================
Net increase/(decrease)
in cash
and cash equivalents 3,749 (29) 786
Exchange gain/(loss) on
cash and
cash equivalents 3 12 (33)
Cash and cash equivalents
at beginning
of period 1,394 641 641
------------------------------------- ------------------------------------- -------------------------------------
Cash and cash equivalents
at end
of period 5,146 624 1,394
======================== ======================== ========================
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 30 Newman
Street, London, W1T 1PT. Europa Oil & Gas's shares are admitted
to trading on the AIM market of the London Stock Exchange.
Basis of preparation
The Group's condensed consolidated interim financial information
is presented in Pounds Sterling (GBP), which is also the functional
currency of the Europa Oil & Gas.
The condensed consolidated interim financial information has
been approved for issue by the Board of Directors on [22] April
2023.
The condensed consolidated interim financial statements have
been prepared in accordance with the requirements of the AIM Rules
for Companies. As permitted, the Group has chosen not to adopt IAS
34 "Interim Financial Statements" in preparing this interim
financial information.
The condensed consolidated interim financial information for the
period 1 August 2022 to 31 January 2023 is unaudited. In the
opinion of the Directors, the condensed consolidated 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 consolidated interim financial
information incorporates unaudited comparative figures for the
interim period 1 August 2021 to 31 January 2022 and the audited
financial year to 31 July 2022.
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 2022.
The comparatives for the full year ended 31 July 2022 are not
the Group'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.
Going concern
The Directors have prepared a cash flow forecast, which
considers the continuing and forecast cash inflow from the Group's
producing assets, the cash held by the Group at the half year end,
less administrative expenses and planned capital expenditure. 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 forecasts are achievable and
accordingly the Group will be able to continue as a going concern
and meet its obligations as and when they fall due for a period of
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 condensed consolidated interim
financial information.
Critical accounting estimates
The preparation of condensed consolidated interim financial
information requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the
end of the reporting period. Significant items subject to such
estimates are set out in Note 1 of the Group's 2022 Annual Report
and Financial Statements. During the interim period significant
additional expenditure was incurred on the drilling of the Serenity
farm-in appraisal well (note 6). Although the appraisal well was
not successful the original discovery is still deemed to be
commercial and significant work on evaluating the development
potential of the discovered hydrocarbon accumulations at Serenity
was ongoing as at 31 January 2023. As such the carrying value of
the Serenity evaluation asset is justified by reference to
indicators of impairment as set out in IFRS 6 and the Group's
accounting policy for exploration and evaluation assets. Based on
judgements at 31 January 2023 there was no write-off capitalised
exploration and evaluation costs. The nature and amounts of other
estimates have not changed significantly during the interim
period.
2 Summary of significant accounting policies
The condensed consolidated financial information has been
prepared using policies based on UK adopted International
Accounting Standards. Except as described below, the condensed
consolidated financial information has been prepared using the
accounting policies which were applied in the Group's statutory
financial information for the year ended 31 July 2022.
(a) Accounting developments during 2022
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 31 January 2023 but
did not result in any material changes to the financial statements
of the Group.
(b) New standards, amendments and interpretations in issue but
not yet effective
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided
not to adopt early. The Group is evaluating the impact of the new
and amended standards which are not expected to have a material
impact on the Group's results or shareholders' funds.
3 Exploration write back/(write off)
31 Jan 2023 31 Jan 2022 31 July 2022
GBP000 GBP000 GBP000
Release of cost
accrual on
relinquishment
of licences - 360 -
Exploration
write-off -
Morocco (1,685) - -
----------------------------------- ----------------------------------- -----------------------------------
(1,685) 360 -
=================================== =================================== ===================================
The Initial Period of the Inezgane licence in Morocco expired in
November 2022 and Group decided not to progress to the First
Extension Period. All previously capitalised costs in relation to
this licence was written-off during the period.
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.
As the Group made a loss from continuing operations during the
interim period ending 31 January 2023, any potentially dilutive
instruments were considered to be anti-dilutive. Therefore, the
diluted EPS is equal to the basic EPS.
The calculation of the basic and diluted earnings per share is
based on the following:
6 months 6 months to Year to
to 31 January 31 July 2022
31 January 2022 (audited)
2023
GBP000 GBP000 GBP000
(Loss)/profit
(Loss)/profit for the period
attributable
to the equity shareholders of the
parent (1,287) 743 1,356
================== ================== ==================
Number of shares
Weighted average number of ordinary
shares for the purposes of basic
EPS 957,457,085 566,466,985 700,028,629
==== ===== ==== ===== ============
===== ==================== ===== ==================== ===========
==========
=
Number of shares
Weighted average number of ordinary
shares for the purposes of diluted
EPS 957,457,085 569,753,951 737,636,450
==== ===== ======= === ============
===== ==================== ======================== ===========
==========
=
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. Due to incurring qualifying expenditure on drilling the
Serenity well, the Group did not generate profits subject to the
Energy Profits Levy during the interim period.
6 Intangible assets
31 Jan 2023 31 Jan 2022 31 July 2022
GBP000 GBP000 GBP000
At 1 August 3,785 6,438 6,438
Additions 4,669 416 1,246
Transfer to
property,
plant &
equipment - (3,894) (3,899)
Exploration
write-off (1,685) - -
----------------------------------- ----------------------------------- -----------------------------------
At period
end 6,769 2,960 3,785
=================================== =================================== ===================================
Intangible assets comprise the Group's pre-production
expenditure on licence interests as follows:
31 Jan 2023 31 Jan 2022 31 July 2021
GBP000 GBP000 GBP000
Serenity 4,647 - 410
Ireland FEL 4/19
(Inishkea) 1,890 1,698 1,789
Morocco Inezgane - 1,037 1,379
UK PEDL180 - - -
(Wressle)
UK PEDL181 106 105 81
UK PEDL182
(Broughton North) 34 34 34
UK PEDL343
(Cloughton) 92 86 92
------------- ------------- ------------
----------------------------------- ----------------------------------- -----------------------------------
Total 6,769 2,960 3,785
============================ ================================ ================================
31 Jan 2023 31 Jan 2022 31 July 2022
GBP000 GBP000 GBP000
Transfer to
Property, plant &
equipment
UK PEDL180
(Wressle) - 3,894 3,899
----------------------------- ------------------------------- --------------------------------
Total - 3,894 3,899
============================ ================================ ================================
======= ======== ========
7 Tangible assets
Property, plant & equipment
Furniture Producing Right of Total
& computers fields use assets
GBP000 GBP000 GBP000 GBP000
Cost
At 1 August 2021 5 10,887 67 10,959
Additions 13 928 - 941
Transferred from
intangible
assets - 3,899 - 3,899
----------------------- -------------------------- ------------------------ -----------------------
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 July 2022 18 15,714 67 15,799
Additions 35 15 24 74
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 January 2023 53 15,729 91 15,873
==================== ==================== ================= ======================
Depreciation,
depletion and
impairment
At 1 August 2021 3 10,552 35 10,590
Charge for year 1 1,601 16 1,618
Impairment - 570 - 570
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 July 2022 4 12,723 51 12,778
Charge for period 10 532 9 551
Impairment - 18 - 18
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 January 2023 14 13,273 60 13,347
=================== ====================== ================= ====================
Net Book Value
At 31 January 2023 39 2,456 31 2,526
=============================== =============================== =============================== ===============================
At 31 July 2022 14 2,991 16 3,021
=============================== =============================== =============================== ===============================
Cost
At 1 August 2021 5 10,887 67 10,959
Transferred from
intangible
assets - 3,894 - 3,894
Additions - 370 - 370
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 January 2022 5 15,151 67 15,223
=================== ====================== ================= ====================
Depreciation,
depletion and
impairment
At 1 August 2021 3 10,552 35 10,590
Charge for period 1 617 9 627
------------------------------- ------------------------------- ------------------------------- -------------------------------
At 31 January 2022 4 11,169 44 11,217
=================== ====================== ================= ====================
Net Book Value
At 31 January 2022 1 3,982 23 4,006
=============================== =============================== =============================== ===============================
8 Borrowings
31 Jan 2023 31 Jan 2022 31 July 2022
GBP000 GBP000 GBP000
Loans
repayable
in less
than
1 year
Bounce back
loan - 10 40
----------------------------------- ----------------------------------- -----------------------------------
Total short
term
borrowings - 10 40
================================== ================================== =================================
Loans
repayable
in 1 to 2
years
Bounce - 10 -
back loan
Loans
repayable
in 2 to 5
years
Bounce - 25 -
back loan
----------------------------------- ----------------------------------- -----------------------------------
Total long - 35 -
term
borrowings
================================== ================================== =================================
In June 2020, the Group received a Bounce Back loan for
GBP50,000 under the Government's Covid-19 policies. The annual rate
of interest is 2.5%. The loan was repaid in full in August
2022.
In September 2022, the Group entered into a loan agreement with
Union Jack Oil, a joint venture partner in the Group's Wressle oil
field to borrow a total of GBP1,000,000 at an annual rate of
interest of 11%. The purpose of the loan was to provide the Group
with additional contingent liquidity for Serenity well operations
conducted in 2022. The additional liquidity was not required and
therefore the loan was repaid in full, with interest, in October
2022.
9 Long term provisions
31 Jan 2023 31 Jan 2022 31 July 2022
GBP000 GBP000 GBP000
At 1 August 4,164 3,393 3,393
Change in
estimated
phasing of
cash
flows - - 538
Charged to the
statement of
comprehensive
income 208 117 233
----------------------------------- ----------------------------------- -----------------------------------
At period end 4,372 3,510 4,164
=================================== =================================== ===================================
10 Post reporting date
On 15 March 2023, the Company announced the retirement, with
immediate effect, of Simon Oddie and the appointment of William
Holland as Chief Executive Officer of the Company. William Holland
previously held the office of Chief Financial Officer. Simon Oddie
remains on the Board of the Company as a non-executive
director.
On 3 April 2023, the Company appointed Alastair Stuart as Chief
Operating Officer and Executive Director of the Company.
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END
IR UAAWROOUSUAR
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