2010 Interim Accounts
2010 Interim Accounts
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Interim Report
EUROPA OIL & GAS (HOLDINGS) plc
For the six months ended 31 January 2010
Chairman's Statement
The six month period from 31 July 2009 saw a combination of
exploration success and portfolio consolidation. The Company now
holds production, appraisal and exploration assets in three core EU
countries: UK, Romania and France. Exploration successes came in
the UK and Romania, where oil was encountered in the Hykeham-1
exploration well and gas tested from the Voitinel-1 well. Portfolio
consolidation came primarily with the relinquishment of the
Egyptian West Darag concession and the development of a more
focused strategy for the Company's European core assets in the near
to medium term.
Production revenues from the UK fields led to a profit before
exploration write-offs and tax of £0.2 million. In September 2009
the Company issued 12,500,000 shares at 14p and raised £1.7
million. The shares were placed with new and existing investors and
represented 16.6% of the Company's enlarged share capital. Europa
participated in the drilling of the Voitinel-1 exploration well
during the later part of 2009. This Romanian well encountered
gas-bearing Miocene sands in a large structural closure. In
February 2010, the operator, Aurelian, announced the potential for
up to 400 billion cubic feet (bcf) of gas in place in the Voitinel
trend, this being 115 bcf net to Europa.
At the other geographical extremity of the EU, Europa drilled
the Hykeham-1 exploration well in November 2009. Situated near the
city of Lincoln in the UK, the well encountered a 4m oil-bearing
sand and the well was cased ready for perforating and an extended
well test. To date only small volumes have been produced,
incompatible with the geological data and so the well is being
shut-in until a decision has been made on the type of remedial
action required.
The Company relinquished its interest in the West Darag
concession, onshore Egypt. The decision, driven by the lack of
identified drill-ready prospects needed to commit to phase 2 of the
concession, resulted in a write-off of the £0.7 million investment
in Egypt. The Directors recognised this was an opportunity to
concentrate on maturing the Company's core European assets.
As a consequence, the Company has a very active programme of
work on its European licences in 2010. Production enhancement work
at West Firsby and workover of the Crosby Warren-2 well will be
undertaken in April with a view to significantly increasing well
productivity. Immediately following on from this work will be the
re-test and frac of Voitinel, which has been delayed by the
persistent winter conditions on-site.
Further out into 2010, a re-mapping of the Berenx gas discovery,
using a 3D seismic volume recently made available, will commence.
In-house estimates of potential gas-in-place at Berenx, which is
20km along trend from the 8.7 trillion cubic feet (tcf) Lacq
gasfield, are up to 1.7 tcf.
The coming six months will see significant progress on the UK
production projects with a target production stream of 500 bopd
from the East Midlands by late 2010. In Romania and France, as
described below, the Company holds large gas resource potential
which it is hoped can be booked into the pre-development contingent
category during the year. The booking of a substantial Contingent
Resource asset and creating stronger production revenues are the
two key value-enhancing drivers for the shareholders in 2010.