TIDMEOG
Europa Oil & Gas (Holdings) PLC
01 August 2017
Europa Oil & Gas plc / Index: AIM / Epic: EOG / Sector: Oil
& Gas
Europa Oil & Gas (Holdings) plc ('Europa' or 'the
Company')
Shareholder Newsletter
Europa Oil & Gas (Holdings) PLC is pleased to provide its
investors with the following update on its portfolio of multistage
licences offshore Ireland and onshore UK:
Dear Investor,
As you will know, Europa has built a strong portfolio of
exploration licences offshore Ireland in an area which has recently
seen keen interest from industry majors including Statoil,
ExxonMobil, Eni, BP, Nexen, TOTAL and Woodside.
We also have licences onshore UK, including the Holmwood
exploration prospect in the Weald Basin, near to the highly
publicised Horse Hill, Broadford Bridge and Brockham wells.
To be involved in two key exploration areas which are seeing
current drilling activity is very exciting and offers the prospect
of Europa benefitting from the maturing of these highly prospective
basins.
The aim of this newsletter is to provide investors with
information regarding these activities and explain the implications
or potential "read across" for Europa.
Ireland
On the western side of the South Porcupine Basin in FEL 2/14,
Providence are drilling the 53/6-A exploration well. The well was
spudded on 12 July 2017 and will target two prospects: a Paleocene
prospect "Druid" and a Cretaceous fan prospect "Drombeg"
http://bit.ly/2u2khbi.
When Providence were awarded the licence in 2011 they held 80%
interest with their partner Sosina 20%. Since then, a subsidiary of
Cairn Energy has farmed in to take a 30% working interest
http://bit.ly/2uVUdCU and a subsidiary of TOTAL S.A. has an option
to farm-in and take a 35% interest http://bit.ly/2qVKt6L. As well
as their financial contribution, these companies provide a
significant technical endorsement of the project.
This is an important well for all players in the basin. It will
be the first exploration well to evaluate both the Paleocene play
and the Cretaceous fan play in the South Porcupine basin and with
the benefit of modern 3D seismic data and using a state of the art
sixth generation drillship. The oil industry and the investor
community will be paying close attention to the results of the well
as and when they are announced.
Europa has interest in four licences in the South Porcupine: In
the East FEL 3/13 and FEL 1/17 both 100%; and in the West FEL 2/13
(100%) and LO 16/19 (30% following the Cairn farm-in
http://bit.ly/2m19mLI). A successful outcome to the Druid/Drombeg
well has the potential to increase the geological chance of success
on the combined 4.2 billion boe gross mean un-risked prospective
resources (GMUPR) across the four Europa licences.
Drombeg is a Cretaceous Fan prospect at the same stratigraphic
level (Albian) as the Beckett and Shaw fans 90 km to the east in
Europa's FEL 3/13. Success at Drombeg will directly de-risk a
combined 1 billion boe GMUPR in Beckett and Shaw and it may
substantially de-risk the 428 million boe GMUPR Valanginian age
Wilde fan also in FEL 3/13 http://bit.ly/2ucExH4.
Adjacent to FEL 3/13 is FEL 1/17. Europa has identified three
pre-rift prospects with combined 898 million boe GMUPR
http://bit.ly/2hgIvgH . The pre-rift play comprises Jurassic
reservoirs in tilted fault block structures, the analogue is the
Brent Province in the North Sea.
Whilst success at Druid and Drombeg will not de-risk the
reservoir and trap of the pre-rift play it will de-risk the source
rock element of the play in FEL 1/17. Europa is conducting a 3D
reprocessing project on its propriety data over both FEL 3/13 and
FEL 1/17 with the objectiveof de-risking the pre-rift prospects in
both licences. The reprocessing project will be completed during Q4
2017.
Europa's two licences 100kms north of Druid/Drombeg includes a
100% interest in FEL 2/13 where 9 prospects in the pre-rift,
syn-rift Cretaceous apron and Cretaceous slope plays have been
identified http://bit.ly/2f1q8f7 . Whilst success at Druid and/or
Drombeg will not directly de-risk these prospects they may de-risk
the source rock element and provide additional clues as to
reservoir provenance. Europa is conducting a 3D reprocessing
project over FEL 2/13 with the intent of improving prospect
definition and maturing prospects to drill ready status. This work
will be completed during H1 2018.
LO 16/19 is adjacent to FEL 2/13 and we are confident that
Cretaceous channel systems identified in FEL 2/13 are feeding
Cretaceous submarine fans in LO 16/19. In March Europa announced
that it had farmed out a 70% interest and operatorship to Cairn
Energy http://bit.ly/2m19mLI . The Crean 3D multiclient survey is
currently being acquired and in due course this will provide a
detailed prospect inventory over LO 16/19
http://bit.ly/2uQns7L.
Success in the Drombeg Cretaceous fan prospect will likely
de-risk any Cretaceous fan prospects identified in LO 16/19.
Europa has a number of Paleocene leads in its South Porcupine
licences and any success at the Druid Paleocene prospect will
accelerate technical work on these leads with the intention of
maturing them to prospect status.
In conclusion Providence's Druid/Drombeg well has the potential
to de-risk 4.2 billion boe GMUPR across Europa's four licences in
the South Porcupine. The results are most relevant to the
Cretaceous fan prospects and Paleocene leads respectively in FEL
3/13 and LO 16/19 but they may also de-risk the source rock element
of the pre-rift, syn-rift, Cretaceous slope and Cretaceous shelf
plays in FEL 2/13 and FEL 1/17.
We understand that Providence are likely to provide an update
"once the Paleocene Druid prospect has been penetrated or as
appropriate". Like the rest of the industry we will be paying close
attention to any announcements.
The outcome of the Drombeg/Druid well will have no bearing on
our 100% owned LO 16/20 and LO 16/21 400 km to the north in the
Slyne Basin adjacent to the producing Corrib gas field. The field
has a gross plant capacity of approximately 350 million cubic feet
of natural gas per day, provides approximately 60% of Ireland's
natural gas consumption and constitutes approximately 95% of
Ireland's gas production. These two licences are targeting a low
risk infrastructure led play in the Greater Corrib area. Here too
there has been considerable corporate activity in recent months,
specifically Nexen farming into an 80% interest in Faroe
Petroleum's LO 16/23. More recently Vermilion and the Canada
Pension Plan Investment Board, the investment arm of Canada Pension
Plan, acquired a 45% interest in the Corrib gas field itself for
US$1.23bn http://bit.ly/2sPWhII .
Onshore UK
There is ongoing exploration and development activity in the
Weald Basin that is relevant to our licence PEDL 143 and the
Holmwood prospect.
The Horse Hill-1 well in PEDL 137 was reported to produce 323
bopd from Portland sandstone reservoir (over an 8.5 hour period)
and a combined 1,365 bopd from two Kimmeridge limestone units (over
up to 7.5 hours) http://bit.ly/2uSSjmO. The Portland sandstone is a
well-known producing reservoir in the Weald basin and the Portland
flow rate at Horse Hill is regarded as very good for an exploration
well. The Kimmeridge limestone at Horse Hill represents a new play
in the Weald Basin and the reported flowrate is outstanding for an
onshore exploration well. Europa's Holmwood prospect in PEDL 143 is
8 km to the west of Horse Hill in an identical structural position.
The Horse Hill well has increased the geological chance of success
on the Portland sandstone reservoir at Holmwood and we believe that
the Kimmeridge limestone that flowed at Horse Hill is also present
at Holmwood.
5 km to the north of Holmwood is the Brockham field and earlier
this year the operator Angus Energy announced that electric logs
have identified the presence of Kimmeridge limestone
http://bit.ly/2m28uJr.
More recently UKOG drilled the Broadford Bridge well in PEDL 234
and found a thick sequence of Kimmeridge with five limestone
intervals. The limestones were cored and were found to have live
light oil seeping at surface http://bit.ly/2tWu4PU.
Key unknowns are: what is the connected volume that a well
penetration of the Kimmeridge limestone is accessing; and is this
volume capable of commercial production? These unknowns will be
addressed this summer when UKOG conduct an extended well test (EWT)
of Kimmeridge limestone at the Broadford Bridge well. A positive
result from the Broadford Bridge EWT is important since it will
provide an indication of what might be possible from the Kimmeridge
limestone at Holmwood and PEDL 143. Closer to home, UKOG are
seeking regulatory approval for an EWT and appraisal drilling at
Horse Hill http://bit.ly/2vWEznL. Again, a positive outcome to the
EWT at Horse Hill will be encouraging for PEDL 143 and Holmwood.
And finally, Angus intend to bring the Kimmeridge limestone
reservoir into production from Brockham-X4Z following OGA consent
of the Field Development Plan Addendum http://bit.ly/2tzdt5E .
Whilst there will be much focus on the Kimmeridge limestone EWTs
at Broadford Bridge and Horse Hill and the read across for
Holmwood, we should not forget that the Portland sandstone at
Holmwood alone may justify commercial development.
Europa activity
The TGS Crean multi-client 3D survey is in progress and will
provide complete 3D coverage over LO 16/19. Acquisition will be
completed during Q3 2017, we anticipate delivery of the processed
dataset in summer 2018 followed by geological and geophysical
interpretation leading to a prospect inventory towards the end of
2018. Following the farm-out to Cairn announced in March 2017
http://bit.ly/2m19mLI we are carried on this 3D programme.
Seismic reprocessing projects are in progress on 2013
proprietary 3D over FEL 3/13, FEL 1/17 and FEL 2/13. FEL 3/13 and
FEL 1/17 reprocessing will be completed during Q4 2017 and will
lead to a revised prospect inventory over both licences. We
anticipate that the biggest impact will be to improve and de-risk
the pre-rift prospects. Reprocessing over FEL 2/13 will be
completed in H1 2018 and will lead to a revised prospect inventory
with emphasis on the pre-rift, syn-rift and Cretaceous shelf
prospects.
A reprocessing project of 3D seismic over LO 16/20 in Slyne
basin next to the Corrib gas field is in preparation.
Our objective is to deliver at least six drill ready prospects
from our portfolio by the end of 2018. Currently we have two
prospects that we regard as drill ready; Wilde and Beckett in FEL
3/13. The other key activity is farm out activity. We have got one
farm-out away so far this year to Cairn in LO 16/19
http://bit.ly/2m19mLI and we are working hard to make further
progress across the portfolio and with particular emphasis on the
South Porcupine licences.
In the UK we are working to discharge remaining conditions to
enable drilling of the Holmwood well in PEDL 143 towards the end of
2017. The joint venture partnership is looking forward to a
positive outcome from the Wressle planning inquiry in November.
I look forward to providing further updates in due course.
* * ENDS * *
For further information please visit www.europaoil.com or
contact:
+ 44 (0) 20 7224
Hugh Mackay Europa 3770
+ 44 (0) 20 7224
Phil Greenhalgh Europa 3770
+ 44 (0) 20 7220
Matt Goode finnCap Ltd 0500
+ 44 (0) 20 7220
Simon Hicks finnCap Ltd 0500
+ 44 (0) 20 7220
Emily Morris finnCap Ltd 0500
+ 44 (0) 20 7236
Frank Buhagiar St Brides Partners Ltd 1177
+ 44 (0) 20 7236
Susie Geliher St Brides Partners Ltd 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 2016 Europa produced 123 boepd. Its highly
prospective exploration projects include the Wressle development
(targeting production start-up in 2018 at up to 500 bopd gross) in
the UK 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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