Europa Oil & Gas (Holdings) plc (`Europa' or the `Company')
2007 End of Year Review
The Directors of Europa Oil & Gas (Holdings) plc, the exploration and
production company, are pleased to provide a review of the Company's financial
and operational highlights for the 2007 calendar year.
Financial Highlights
In May, the Company undertook a reorganisation of its Romanian portfolio,
generating £2.0 million cash and a £2.5 million contribution to future drilling
costs.
Also in May, the Royal Bank of Scotland, bankers to the Company, provided a £
2.0 million credit facility, primarily for use on its UK production projects.
In June, agreement was reached with Gemini Oil & Gas Limited to repay the loan
provided for the purchase of the West Firsby Oilfield and cancel Europa's
obligation to make payments to Gemini from future field revenues. The loan was
fully settled in November.
In July, Europa contracted Energy Resource Consultants Limited to undertake an
independent review of the Company's UK oil reserves. Following the review the
Company was able to increase its booked Proven plus Probable reserves by 75% to
1.0 million barrels of oil (at 31 July, 2007).
Europa ended 2007 with daily oil production of approximately 250 bbls/day at a
realised price of $90/bbl. This provides Europa with a healthy monthly cashflow
currently in the region of $700,000/month.
Operational Highlights
In February, Europa was awarded operatorship and a 50% interest in two blocks
in the UK East Irish Sea. These blocks, 109/5 and 112/30, contain the large
Ellen Vannin Prospect, an undrilled structure with most-likely Prospective
Resources of 1.6 trillion cubic feet (tcf) of gas (270 million barrels of oil
equivalent).
In March, Europa was awarded the Béarn des Gaves Permit in the Aquitaine Basin
of southwest France. The acreage lies adjacent to the largest onshore gas
producing area in France, the Lacq/Meillon Gasfields, which together have
produced over 12 tcf (2 billion barrels of oil equivalent).
In April, the Company completed the acquisition of 50km of 2D seismic over its
southwest Lincoln acreage (PEDL150). The interpretation of the seismic data has
identified a very low-risk prospect demonstrating a common closing contour with
the nearby Whisby Oilfield and updip of a well with very strong oil shows.
In June, a Production Sharing Contract on the West Darag Licence was signed
with the Egyptian Authorities. The Company subsequently built a highly
competent team in Cairo to execute the first phase of exploration. This team is
headed by Dr. Darwish Khaled, the former Chief Executive of GUPCO, the
Egyptian-BP joint venture company.
In August, the UK East Midlands Crosby Warren-2Y well was drilled and
subsequently put into production in November 2007. A fracture stimulation of
the well is planned which it is hoped will provide similar results to that
achieved in Crosby Warren-1, which produced at 400bopd following a similar
stimulation.
In November, the Romanian East Carpathian Boistea-1 well reached total depth.
The well encountered a thin gas bearing sand and is awaiting execution of a
test programme scheduled for January 2008.
In December, the Company was informed by the French Government of the exclusive
award of the Tarbes - Val d'Adour Permit, near its existing acreage in the
Aquitaine Basin. The permit contains the Jacque and Osmets oil fields, which
produced light oil until 1986, when the oil price fell to around $10 per barrel
and the fields were shut-in. The initial flow rate from wells on these fields
was up to 700 barrels of oil per day and the conclusion of a preliminary review
indicates that the fields may contain significant undeveloped reserves.
Paul Barrett, Managing Director, said `2007 was an active year and sets the
Company up for strong growth in 2008. Production enhancement projects will be
the initial focus in the UK. With up to 4 wells planned in 2008, the pipeline
of significant exploration upside continues to build in all of our countries of
operation.'
A comprehensive Research Note on Europa by Hardman & Co. is expected to be
published in the very near future.
The Company's half year accounts to 31st January 2008 are anticipated to be
released in late April 2008.
Contacts:
Europa Oil & Gas +44 1235 553 266 Paul Barrett
Seymour Pierce +44 20 7107 8000 Jonathan Wright / Parimal Kumar