Europa Oil & Gas: FEL 3/13 Prospects Valued at $1.1 Billion

Europa Oil & Gas: FEL 3/13 Prospects Valued at $1.1 Billion
A 100% working interest in 3 prospects on FEL 3/13, in the Porcupine Basin offshore Ireland, holds a risked net present value of $1.1 billion, according to an independent assessment by ERC Equipoise.

Europa Oil & Gas plc announced Monday that a 100 percent working interest in three prospects on FEL 3/13, in the Porcupine Basin offshore Ireland, holds a risked net present value (NPV) of $1.1 billion, according to an independent assessment undertaken by ERC Equipoise (ERCE).

The assessment, which also revealed that the assets have a mean un-risked net present value of approximately $7 billion, was undertaken following a competent persons report in May, prepared by ERCE, which detailed total gross mean un-risked prospective resources of 1.5 billion barrels of oil equivalent across the three prospects in FEL 3/13. Following the announcement on September 22 that Kosmos Energy Ireland intends to withdraw from its Ireland licenses, Europa instructed ERCE to undertake the assessment to reflect a 100 percent working interest in the permit. The estimate provided incorporates an updated oil price assumption and cost deck.

Europa Oil & Gas plc CEO Hugh Mackay commented in a company statement:

“With the imminent departure of Kosmos from the license our net interest will revert to 100 percent, subject to government approval, with a potential net mean un-risked NPV10 of approximately $7 billion and a net mean risked NPV10 of $1.1 billion estimated by ERCE. We believe this is a very strong indication of the commercial potential in our licenses in offshore Ireland.

“To realize this potential we need to drill exploration wells and find oil. Our mission is to land a farm-in partner to share the costs of drilling and the target audience is major and midcap oil companies. As a consequence of the drop in oil prices day rates for state of the art harsh-environment deepwater drilling rigs have halved. The next few years offer an opportunity to drill offshore Ireland at the lowest rig costs in over a decade. We are encouraged by the high levels of participation in the 2015 Atlantic Margin Licensing Round, particularly given the low oil price. It would appear that many other companies share our belief in the technical and commercial case for exploration offshore Ireland. I look forward to updating the market in due course as we focus on securing a farm-in partner with whom we can work to unlock the potential value of these prospects.”

In an interview with Rigzone earlier in October, Hugh Mackay confirmed that the company will begin the farm-out process of its assets in the Porcupine Basin, offshore Ireland, as early as January 2016.

Commenting on the company’s farm-out plans, the Europa Oil & Gas CEO told Rigzone:

“If everything goes according to plan, we’re not going to remain at 100 percent for too long. We will be putting a lot of effort to getting in a farm … In terms of really moving the needle on Europa, the UK stuff keeps the storeboard ticking over – it’s important, it can generate revenue – but in terms of hitting the home run, that’s in Ireland. These prospects are company makers. We’re talking about prospects which are hundreds of millions of barrels and this has all been audited and validated.”

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