Europa Oil & Gas (Holdings) plc has signed a farm-out agreement in relation to a 7.5 percent working interest in the PEDL143 license, located in the Weald Basin, with Union Jack Oil and Gas plc (UJO).
The deal, which is subject to approval from the Oil & Gas Authority, will see Europa retain a 32.5 percent interest in, and operatorship of, PEDL143 alongside Egdon Resources (18.4 percent stake), Altwood Petroleum (1.6 percent interest), Warwick Energy (10 percent interest), UKOG (30 percent interest), and UJO (7.5 percent interest).
PEDL143 contains the conventional Holmwood prospect which has estimated gross mean unrisked prospective resources of 5.6 million barrels of oil in Portlandian and Corallian sandstones and a P90 – P10 range of resources of 1 to 11 million barrels of oil. Planning permission is in place for a deviated exploration well to be drilled at Holmwood and drilling operations are anticipated to commence in late 2016/early 2017.
UJO will pay 15 percent, and Europa 25 percent, of the costs to drill an exploration well at Holmwood, up to a gross well cost of $4.6 million (GBP 3.2 million). For gross well costs above the $4.6 million cap, UJO will pay 7.5 percent and Europa 32.5 percent.
“The farm-out of an interest in Holmwood is in line with our strategy to advance our multistage portfolio of licenses while at the same time managing risk,” said Europa CEO Hugh Mackay in a company statement.
“We rate Holmwood as one of the best undrilled conventional prospects in the UK,” he added.
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