Europa Oil & Gas (Holdings) PLC Sale of Interest in Wressle Discovery

 
TIDMEOG 
 
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas 
 
27 September 2016 
 
          Europa Oil & Gas (Holdings) plc ('Europa' or 'the Company') 
 
                     Sale of Interest in Wressle Discovery 
 
Europa Oil & Gas (Holdings) plc, the AIM traded oil and gas exploration, 
development and production company focused on Europe, is pleased to announce it 
has signed a Sale and Purchase Agreement (`SPA') in relation to its 33.34% 
interest in PEDL180 and PEDL182 ('the Licences') in North Lincolnshire with 
Union Jack Oil plc ('UJO').  The Licences cover the Wressle discovery (PEDL180) 
and the Broughton North prospect (PEDL182). 
 
  * Under the terms of the SPA, UJO will acquire a 3.34% working interest in 
    the Licences from Europa for a cash consideration of GBP600,000 
  * The transaction implies a GBP5.4 million mark to market for Europa's 
    remaining 30% interest in the Licences 
 
  * Wressle is anticipated to commence production at a gross rate of 500 bopd 
    in early 2017 
  * Europa's anticipated net share of 150 bopd from Wressle is expected to more 
    than double existing production from the West Firsby and Crosby Warren 
    fields and Whisby-4 well 
  * Summary details of a Competent Persons Report compiled by ERC Equipoise 
    Limited ('ERCE') were published by Europa and its partners in respect of 
    Wressle and the Broughton North Prospect on 26 September 2016 
  * Subject to approval of the assignment of interest from the Oil & Gas 
    Authority, Europa will retain a 30.00% interest in the Licences alongside 
    Egdon Resources UK Limited (25.00%), Celtique Energie Petroleum Limited 
    (33.33%) and Union Jack Oil plc (11.67%) 
 
Europa CEO Hugh Mackay said, "We consider this transaction to represent a 
sensible monetisation of part of the asset now it has been largely de-risked, 
whilst still retaining sizeable exposure to production and upside on the other 
reservoirs.  Importantly, this transaction provides investors with a point of 
reference for the value of our remaining 30% interest in the Licences.  At GBP5.4 
million our 30% interest in these two licences accounts for almost half our 
current market capitalisation. 
 
"PEDL180 and 182 are just two of a portfolio of licences we hold.  These 
include three UK onshore fields which in H1 produced 124 boepd net to Europa; 
PEDL143 containing the Holmwood prospect in the Weald Basin, which we rate as 
the best undrilled conventional prospect onshore UK; and seven licences 
offshore Ireland which we estimate to have gross mean un-risked prospective and 
indicative resources of more than 4 billion barrels of oil equivalent and 1.5 
tcf of gas.   The funds released will be used to fund our share of drilling the 
Holmwood exploration well in PEDL143, which we anticipate drilling in 2017 
subject to obtaining the relevant permits and permissions. In the meantime, we 
continue with our strategy to advance and monetise our multistage portfolio of 
licences, and in the process generate value for our shareholders." 
 
Europa's net interests following this transaction are tabulated below: 
 
Table summarising gross volumes at Wressle and Broughton North along with net 
volumes attributed to Europa's interests before and after transaction 
 
                                             Gross                            Net Volumes 
                                             Volumes                          attributable 
                                                                              to Europa 
                                                                              before 
                                                                              transaction 
 
                              Oil MMstb      Gas      Oil and  Oil MMstb      Gas 
                                             Bscf     Gas*                    Bscf          Oil and 
                                                      MMboe                                 Gas* 
                                                                                            MMboe 
 
Wressle 
2P Ashover Grit  and          0.62           0.20     0.65     0.21           0.07          0.22 
Wingfield Flags 
 
2C Penistone Flags 
                              1.53           2.00     1.86     0.51           0.67          0.62 
 
 
Broughton North               0.51           0.51     0.60     0.17           0.17          0.20 
Mean Unrisked  Prospective 
Resources 
 
 
 
                                             Gross                            Net Volumes 
                                             Volumes                          attributable 
                                                                              to Europa 
                                                                              after 
                                                                              transaction 
 
                              Oil MMstb      Gas      Oil and  Oil MMstb      Gas 
                                             Bscf     Gas*                    Bscf          Oil and 
                                                      MMboe                                 Gas* 
                                                                                            MMboe 
 
Wressle 
2P Ashover Grit  and          0.62           0.20     0.65     0.19           0.06          0.20 
Wingfield Flags 
 
2C Penistone Flags 
                                        1.53 2.00     1.86     0.46           0.60          0.56 
 
 
Broughton North               0.51           0.51     0.60     0.15           0.15          0.18 
Mean Unrisked  Prospective 
Resources 
 
*Gas converted to oil equivalent using 6 Bscf/MMboe conversion and added to oil 
volume 
 
Glossary: 
 
Some of the terms used in this announcement are defined below. A more 
exhaustive glossary is contained in ERCE's letter to Europa's Board of 
Directors summarising the findings of their CPR has been published on the 
Company's website (www.europaoil.com). 
 
Proved Reserves 
 
Proved  Reserves  are  those  quantities  of  petroleum,  which  by  analysis 
of  geoscience  and  engineering data,  can  be  estimated  with  reasonable 
certainty  to  be  commercially  recoverable,  from  a  given  date forward, 
from  known  reservoirs  and  under  defined  economic  conditions,  operating 
methods,  and government regulations. 
 
If deterministic methods are used, the term reasonable certainty is intended to 
express a high degree of confidence that the quantities will be recovered.  If 
probabilistic methods are used, there should be at least a 90% probability that 
the quantities actually recovered will equal or exceed the estimate. The area 
of the reservoir considered as Proved includes: 
 
  * the  area  delineated  by  drilling  and  defined  by  fluid  contacts, 
    if  any,  and 
  * adjacent  undrilled  portions  of  the  reservoir  that  can  reasonably 
    be  judged  as  continuous with  it  and  commercially  productive  on 
    the  basis  of  available  geoscience  and  engineering data 
 
In the absence of data on fluid contacts, Proved quantities in a reservoir are 
limited by the lowest known hydrocarbon  (LKH)  as  seen  in  a  well 
penetration  unless  otherwise  indicated  by  definitive  geoscience, 
engineering,  or  performance  data.  Such definitive  information  may 
include  pressure  gradient  analysis and  seismic  indicators.  Seismic  data 
alone  may  not  be  sufficient  to  define  fluid  contacts  for  Proved 
Reserves  (see  "2001  Supplemental  Guidelines,"  Chapter  8).  Reserves  in 
undeveloped  locations  may  be classified as Proved provided that the 
locations are in undrilled areas of the reservoir that can be judged with 
reasonable certainty to be commercially productive and interpretations of 
available geoscience and engineering  data  indicate  with  reasonable 
certainty  that  the  objective  formation  is  laterally  continuous with 
drilled Proved locations.  For  Proved  Reserves,  the  recovery  efficiency 
applied  to  these  reservoirs  should  be  defined  based  on  a range  of 
possibilities  supported  by  analogues  and  sound  engineering  judgment 
considering  the characteristics of the Proved area and the applied development 
programme. 
 
2P 
 
Proved + Probable, a best estimate category of Reserves. 
 
Contingent Resources 
 
Contingent  Resources  are  those  quantities  of  petroleum  estimated,  as 
of  a  given  date,  to  be  potentially recoverable  from  known 
accumulations  by  application  of  development  projects,  but  which  are 
not currently considered to be commercially recoverable due to one or more 
contingencies. 
 
Contingent  Resources  may  include,  for  example,  projects  for which 
there  are  currently  no  viable markets,  or  where  commercial  recovery 
is  dependent  on  technology  under  development,  or  where evaluation  of 
the  accumulation  is  insufficient  to  clearly  assess  commerciality. 
Contingent  Resources  are further  categorized  in  accordance  with  the 
level  of  certainty  associated  with  the  estimates  and  may  be sub? 
classified based on project maturity and/or characterized by their economic 
status. 
 
2C 
 
A best estimate category of Contingent Resources. 
 
Prospective Resources 
 
Prospective  Resources  are  those  quantities  of  petroleum   which  are 
estimated,  as  of  a  given  date,  to  be potentially recoverable from 
undiscovered accumulations. Potential accumulations are evaluated according to 
their chance of discovery and, assuming a discovery, the  estimated 
quantities  that  would  be  recoverable  under  defined  development 
projects.  It  is recognized  that  the  development  programs  will  be  of 
significantly  less  detail  and  depend  more  heavily on analog developments 
in the earlier phases of exploration. 
 
                                 * *S * * 
 
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 H1 2016 Europa produced 124 boepd. 
Its highly prospective exploration projects include the Wressle development 
(targeting production start-up in early 2017 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 Vermilion Energy also in 
onshore France; and seven licences offshore Ireland with the potential to host 
gross mean un-risked prospective and indicative resources of more than 4 
billion barrels oil equivalent and 1.5 tcf gas across all seven 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. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 27, 2016 02:00 ET (06:00 GMT)